The Bears Are In Full Retreat

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In his Daily Market Notes report to investors, Louis Navellier wrote:

Market Melt-up

The market is melting up.

Equities are on fire and have gone one way since mid-May. The FOMO (Fear of Missing Out) is becoming intense. The earnings season has kicked off with a very positive tone. Interest rates are drifting lower, gold and crude oil are drifting higher, as are high yield and crypto. The VIX is back near the low for the year. The rally is broadening with the even weighted S&P and Russell 2000 outperforming.

Nobody is talking about the Fed’s hawkishness, the weakness in China, nor the escalation in Ukraine. The shockwaves of the Fed raising interest rates 5% over the last year are hard to find, as the typical victims of higher rates, housing and autos demand, remain strong.

Bears in Retreat

Concerns over the stretched consumer are not showing up yet; Amazon Prime Day was the biggest day in their history. The Bears are in full retreat, and we still aren’t hearing much about the sell-down of money market funds into equities, which seems inevitable. Investment managers are under high pressure to chase the market as waiting for a pullback is getting very expensive. The Bears are struggling to find a new reason for what is going to derail this rally.

In a longer view, the belief that AI will be able to lead to cost savings sooner rather than later is not fading. Yesterday, Microsoft announced they will be offering a new AI add-on to Microsoft Office to corporate accounts for an additional $30 a month per subscriber, and the MSFT stock already up 45% YTD jumped another 5%.

More Buyers Than Sellers

Valuations are getting to lofty levels, especially given the hawkish Fed, and central banks around the globe in general, this time not only raising overnight rates but also running down their massive balance sheet, but for now, until problems show up in earnings there is clearly more buyers than sellers and the question appears to be not whether to buy or not, but what to buy.

Coffee Beans: Bear Up

A globetrotting teddy that was accidentally left behind on a mountain in Scotland will soon be reunited with his delighted owner after being rescued by a hiker. Alastair Tyson, owner of ‘Mini Tyson,’ said the teddy has been with him to Rome, Florence, Venice, France, and all around England. Source: Sky News. See the full story here.