TME Weekend: Teflon bull

The Market Ear Picture


The top 13 stocks have driven the whole of the S&P’s YTD upside with the top five contributing ~70%.

Source: Bloomberg


The January indicator

Since 1953, when the S&P 500 ended January up at least 2%, it finished the rest of the year with a median gain of 13.5% and finished green 84% of the time.

Source: Bespoke


Nice surprise

Surprises have recently jumped, an indication of better recent reports.

Source: UBS


This bull doesn't care about earnings misses

Despite the fact that >20% of SPX cos have missed, on average, they are still getting rewarded for it.

Source: Jefferies


Yikes for yield curve bears

1. Economic growth matters more for equity returns than movements in the yield curve. Stocks have typically posted the greatest returns during periods of strong economic growth, regardless of whether the yield curve was steepening or flattening.

2. Equity returns following yield curve normalization have also been positive provided the US economy avoided a recession. (Kostin)

Breaking below

Despite stronger growth, core PCE inflation is breaking below the Fed’s target now.

Source: Macrobond


Die prächtige 5 fünf

Germany has its version of Magnificent 5 stocks. An index consisting of SAP, Siemens, Allianz, Munich Re, and Deutsche Telekom has outperformed the Dax Price Index by almost 90ppts over a 10y period.

Source: Holger Z


Hmmm on positioning

The 2 charts show relative performance of the stocks that are the biggest overweights and underweights in US mutual funds. What type of market & world does this signal...?

Source: Goldman


What did I miss?

Premium subscribers could this weekend read:

1. The curious case of the somber sentiment. How to think about sentiment & positioning analysis at this stage of the bull.

2. Hope springs eternal in China; green shoots lead to largest buying in 5 years. 

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