QuiCQ 13/11/2024
Stick in the Wheel
“There's always a bull market somewhere”
— Jim Cramer
After five days of a face-ripping (US) equity market, matters cooled down somewhat in yesterday session. Gosh, did we need a break! Putting together this week’s Quotedian (read it here), was a real nightmare, with so many old and new trends to write about!
Hence, in that context let’s keep it short and sweet today, especially given that this afternoon another game changer, the US CPI could lay at hand. As I have written in the past, the CPI, a super-lagging and mostly manipulated measure of inflation, should not matter to markets at all. However, since the post-pandemic rise in inflation it has.
Strangely enough, this time around, probably due to all the pre- and post-election excitement, nobody seems to be thinking and much less talking about it.
To me, given the recent FOMC rate cuts, the bond market’s reaction to those and the incoming budget-generous government, I would have a very close eye on that number going forward. It could catch out the market pretty wrongly positioned and hence be a major stick into the collective investment wheel.
Stay tuned …
Today’s Quote of the day “There's always a bull market somewhere” is attributed to Jim Cramer of CNBC fame and if that is so, it is probably to most only reasonable thing to come out of his corner…
Today I hijack that quote and turn it into “There's always a bear market somewhere”. We had already discussed in this publication AND The Quotedian in the past, that tech stocks had topped out versus the overall market a few months ago and quite precisely at the same level as they did on a relative basis in 2000. What was brought to my attention via a chart crossing my inbox yesterday, is that small cap tech stocks (PSCT - Invesco SmallCap Tech ETF) relative to overall small cap stocks (SPSM - SPDR S&P 600 Small Cap ETF) is down nearly 20% - the definition of a bear market - from its top back in May 2023.
