Happy Birthday, America
Yesterday, it was another late spurt for the market that saw the three major indices close at the high of the session, and the S&P 500 notch another record. That’s the third in nine sessions - 87 since President Trump and 96 since the November 2016 election. The Russell 2000 was hit once again. I’m not sure what’s happening there, but it’s not a proxy for the domestic economy.
What’s amazing is just like stocks kind of waltzed higher into the close, the entire year has had a stealth-like feeling that has masked magnificence. Let’s not forget about the doom and gloom of May, which began with Fed Powell dashing rate cut hopes, and then more tariffs angst. The naysayers have been calling for a correction through it all and have led a lot of investors astray.
But what is the message of the market? Well, it is a welcoming message that there is more to the stock market than six momentum names. However, don’t count those names out, either.
S&P 500 Index | +18.25% |
Communication Services (XLC) | +20.20% |
Consumer Discretionary (XLY) | +21.45% |
Consumer Staples (XLP) | +15.05% |
Energy (XLE) | +11.19% |
Financials (XLF) | +17.25% |
Health Care (XLV) | +7.62% |
Industrials (XLI) | +20.31% |
Materials (XLB) | +16.69% |
Real Estate (XLRE) | +18.39% |
Technology (XLK) | +27.91% |
Utilities (XLU) | +12.40% |
It’s hard to fathom there could be a repeat performance in the second half of the year; and yet, it is occurring without fanfare or even recognition. The financial press has been adamantly against this rally and wonders out loud each day when the crash is going to happen.
The great news for individual investors is professional money-managers have been so far behind the curve, they must make moves quickly. And the more they put their billions to work, the more others will be forced to follow. By the end of the week, we’ll have a better handle on whether they can hold out or not.
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Meanwhile, shorts continue to get hammered and once again, Tesla (TSLA) will smack them around. The company announced the delivery of 95,200 vehicles, sending shares up $16.00. The stock is still well below its all-time high, and shorts in the stock have a cult-like belief. This stock should be changing hands in the single digits.
Portfolio Approach
We don’t have much cash. So, we are reexamining positions, as we consider raising cash to fund new ideas.
Communication Services | Consumer Discretionary | Consumer Staples |
1 | 4 | 1 |
Energy | Financials | Healthcare |
1 | 2 | 1 |
Industrial | Materials | Real Estate |
2 | 3 | 1 |
Technology | Utilities | Cash |
2 | 0 | 2 |
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