The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Moving on.
The worries of yesterday are no longer with us and the dip-buyers are back at their game. Overnight news was of the boring variety and US macroeconomic data was encouraging for US GDP growth. Recession fears continue to melt away and a rally across the Treasury curve alleviated the yield fears and creditworthiness concerns of yesterday as well. Investors have decided to move on from yesterday’s questions despite having no new answers. Either yesterday was a big overreaction or today is a pollyannish turn. As always, we’ll only find out in time. Capital flow was light at 93% so markets weren’t terribly interested in being active today either.
Sentiment has already healed from yesterday’s bruising. Unless we hit another fundamental hiccup, markets have returned to risk-on and are picking up where they left off on Monday. There’s no insight to convey regarding the larger picture either. The big picture is this chart.
This chart is as clear as day. Buy early, buy often, and keep buying.
We went through a month or so of doubt when tariff talk threatened to trigger a nasty recession with some inflation for our troubles. The bearishness was certainly warranted.
However, those concerns are gone and they don’t appear to be returning. Markets want to erase that ugly episode and pretend like it never happened. Bulls are pushing up stocks and playing their part. We’re 5% below the old highs. Dip-buyers view that as an easy 5%. And they are probably right.
See you tomorrow.
-Mike
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