It hasn’t been a disastrous week for the major indexes — all central-bank meetings considered — with the S&P 500 poised to finish up 1.8% with one more session to go. Thursday’s session was strong, marking a record close for the Nasdaq COMP, -0.24%
So what have we learned? Northman Trader’s Sven Henrich says the market has been behaving like a kooky cartoon character. This chart shows just how wacky it was, as it followed the dictates of Fed utterances:
“Investors should be cognizant that higher prices here are driven by two factors only: performance-chasing by underperforming funds, and global central banks adding liquidity at a record pace as there is policy panic about the lack of global growth, productivity and real investment,” Henrich says.
“Markets are getting ever more expensive as a result of 100% multiple expansion and not driven by a strong fundamental underpinning,” he adds.
Dana Lyons of J. Lyons Fund Management devoted his Tumblr blog to crunching the numbers on how fast investors have slid back into the comfort zone on this market. He says don’t count on the short-term pop lasting.
More words of wisdom this morning, this time from J.P. Morgan. Strategist Dubravko Lakos-Bujas who says big market risks have been removed for now, as fears of “taper tantrums” are back on the sidelines. Remember that “sell-everything call” from earlier this year? Check out the chart that shows how it would have been crazy to heed those calls.
Lakos-Bujas, meanwhile, sees additional upside for the S&P 500 in the near term, but says that will be short-lived if a December hike is on the cards. He’s calling for 2,100 at the year’s end for the S&P 500.
Our call of the day takes a look at the market spots that investors have been fleeing, while our chart shows how there are fewer and fewer U.S. stocks to choose from.
Key market gauges
Dow YMZ6, -0.08% and S&P futures ESZ6, -0.16% are slightly lower. Asian markets ADOW, -0.04% finished mixed, with a 1% pop higher for Australian stocks XJO, +1.06% while on the downside, the Nikkei NIK, -0.32% fell on yen USDJPY, +0.24% strength. European stocks SXXP, -0.84% are in the red, led by banks.
Gold GCZ6, -0.29% is poised for a fourth straight day of gains. Oil prices CLX6, -0.84% are recovering from a slide earlier this morning, which came amid a report that the Saudis are offering to cut production in return for Iran freezing output. OPEC talks are looming for next week (here’s our primer). Watch out for rig-count data later.
For retail investors following money trails, or those wanting to know where the crowd is headed, the below data can be helpful. ETF.com has rounded up the exchange-traded funds with the biggest outflows so far this year. Combined redemptions are worth $30 billion:
Six of those are focused on international markets, with Europe and Japan in the spotlight. Among them, WisdomTree Europe’s Hedged Equity Fund HEDJ, -0.59% has given up half the $13.8 billion it raked in last year, as its strong dollar, ECB-stimulus theme hasn’t worked.
ETF.com’s Sumit Roy says Japan-centered funds have suffered on the yen’s rally against the buck and as Tokyo stocks remain unimpressed by the BOJ.
As for the U.S., two sector funds made the loser list: the Financial Select Sector SPDR Fund XLF, -0.23% and the Consumer Discretionary Select Sector SPDR Fund XLY, -0.11% . Two broader-market funds, the Nasdaq 100-based COMP, -0.24% PowerShares QQQ Trust QQQ, -0.15% and the iShares Russell 1000 Growth ETF IWF, -0.18% saw even bigger outflows.
But the big money drain may soon be over — at least for techs. Bank of America Merrill Lynch’s weekly “Flow Show” out Friday reports the largest inflows to tech funds in 10 months ($900 million) on back of fresh all-time highs for the Nasdaq.
On the data docket, there’s just a flash reading on manufacturing PMI to finish off the week coming at 9:45 a.m.
In Philadelphia, an audience will hear from not one, but three Fed speakers: Patrick Harker, Dennis Lockhart and Loretta Mester. Note that in the past, dissenters have made statements after the blackout lifts at midnight Eastern on Friday.
Won’t you tell me, where have all the U.S. stocks gone? Check out this chart from the Political Calculations blog, which reveals that the number of domestic firms listed on U.S. stock exchanges is the lowest on record, going back to 1975:
It overlays the periods of U.S. economic recession and the dot-com bubble, neither of which turn out to be an issue for the company count. Logic would imply recessions would weigh on listings, but three of those downturns coincided with more firms entering the market. As for the dot-com bubble, listings peaked a year before that started to rear its ugly head.
The biggest takeaway? The number of U.S. listed firms has steadily declined from 2013 to the present record low. Read the full post for more.
Facebook FB, -1.76% is in hot water with its big-ad buyers and marketers who learned the social-media website has been exaggerating video view times, according to sources. Shares are off over 2% in premarket.
The number of active rigs in the U.S. has risen in the last 11 of 12 weeks, so all eyes on that Baker Hughes BHI, -2.23% tally for later.
There’s always the golden parachute, Johnny
$200 million —That’s how much Wells Fargo WFC, -0.42% CEO John Stumpf could walk away with if he caves to the intense pressure to step down over the fake-account fiasco, according to some number-crunching by CNNMoney. Stumpf has already quit a Fed advisory panel.
“This uniform doesn’t make him a robot. Just like your uniform, your skin color doesn’t make you a criminal.” — Man gives free hugs to riot cops in Charlotte in a video that has gone viral. While social media is applauding, not everyone at the scene agreed with him.
Meanwhile a Seattle Mariners baseball player is in trouble over some offensive tweets in relation to the Black Lives Matter movement.
Tulsa police officer Betty Shelby has been charged with first-degree manslaughter in fatal shooting of an unarmed black man.
Oculus Rift’s founder is financing a group responsible for viral, anti-Clinton memes
What kind of “Harry Potter” Patronus do you have? This quiz will tell you. (Mountain Hare here)
Secret Service costs for both presidential candidates right now will blow your mind
Have Wall Street’s biggest deal makers been hanging out in Denver?
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