In his Daily Market Notes report to investors, while commenting on the phenomenal earnings, Louis Navellier wrote:
Q2 2021 hedge fund letters, conferences and more
The truth is markets do not do well on Fridays when we’re going to have good weather. And that’s because all our traders are going to disappear early afternoon, so they’d like to clean out their inventory. So, Fridays are tough days for markets.
Alkeon: Big Tech Is Only Just Getting Started
The ACAP Strategic Fund’s managers see a “significant scarcity of attractive asset allocation choices globally,” but also a strong environment for fundamental stock picking. Q2 2021 hedge fund letters, conferences and more According to a copy of the fund’s second-quarter investor update, which ValueWalk has been able to review, its managers currently hold a balanced Read More
Earnings are still phenomenal. But guidance is obviously very, very important. And the market got up on the wrong side of bed because of Amazon. I think we have to just take a step back and remember why most people buy Amazon, and full disclosure, my wife owns it. The main reason most Amazon shareholders don’t sell the stock is they don’t want to pay the taxes.
Pinterest did not help the NASDAQ either. They beat big time. They had earnings of 25 cents and analysts were expecting 13 cents. So that was a huge beat but their average user time was down which set off the alarm bells on Wall Street. It shouldn’t. During colder months, users will spend more time on Pinterest.
The other thing is this Delta variant. I know lots of vaccinated people now that have gotten the Delta variant on COVID. So what’s the fuss about? Well, here’s the deal. It’s more contagious, but it seems to be not as deadly. Now, that’s obviously helps to be vaccinated. We have a country right now that is slowly but surely systematically, freaking out over the Delta variant of COVID-19. And they’re all debating on what do we do about it? You can see it in Congress. I think you have to wear a mask if you go to Congress now. And now everybody’s wearing masks in government again. And our defense secretary was wearing a mask and a face shield just to be double safe.
The PCE Index And GDP Report
The big news today is something called the personal consumption expenditure index which was reported today. It’s the Fed’s favorite inflation indicator ever since Alan Greenspan was Fed chairman. The good news is it didn’t go up as much in June as much as forecasted. This means the Fed has been pretty accurate on their inflation forecast.
We had GDP come out yesterday, and it was shockingly low at six and a half percent versus expectations. Expectations were more like 8% or even some at 9%. Now it might be revised it higher, but it shows that any acceleration in our economy in the second quarter wasn’t near expectations. There are all these lingering concerns out there, but ultimately we feel they will be overcome by phenomenal earnings and low interest rates.
One of those lingering concerns is jobs. I really don’t care what happens on Fridays but Wednesday and Thursday of next week will be much more important because of the ADP employment report and jobless claims. Six point eight million jobs is a lot of jobs to make up. And it’s going to take a lot of months. So that means the Fed is going to remain accommodative and Goldilocks is going to continue. Many fixed income investors have no choice but to go to the stock market and buy dividend yielding stocks, because the stock market yields more than the bonds.
So the foundation of the market is good. Today is not a bad buying opportunity. It will be bumpy in the upcoming months. We should firm up mid September with earnings anticipation and quarterly window dressing them further in mid October with the next round of earnings.