Highlights
• Rising bankruptcies point to a coming recession
• All eyes are on retail sales today — risks are to the downside
• Overweight equity allocations explain the "K-shaped" economy
• Downward revisions to Nonfarm Payrolls are inevitable
While We Were Sleeping
The S&P 500 made its 30th record high of the year yesterday, and there isn’t a day now where somebody on Wall Street isn’t predicting 6,000 by the end of the year (in a major divergence, more stocks have been declining than advancing in recent weeks and the share of S&P 500 stocks trading above their respective 200-day moving averages hit a low for the year yesterday!). When it gets there, a consensus of 7,000 is certain to grow.
The Nasdaq 100 is already challenging the 20,000 milestone. The Nasdaq Composite made a new closing high as it rallied +1% and now holds a gain of nearly +19% for the year so far (+15% for the S&P 500). Some folks can be forgiven for believing the indices are just a tad stretched, considering that the Nasdaq sits more than 8% above its 50-day trendline and more than 18% above its 200-day moving average — and the S&P 500 has gapped more than 13% above the 200-day trendline (not to mention that, in this bifurcated market, three-quarters of this year’s S&P 500 advance has come from the mega-cap Tech space).
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