In his Daily Market Notes report to investors, while commenting on the Fed Put, Louis Navellier wrote:
Q2 2021 hedge fund letters, conferences and more
The Fed Put
NASDAQ opened this morning to yet another all time high and the FANG names march higher. The Fed Put is alive and well. Today's ADP payroll number, which showed a big miss, took the wind out of the Dow. However, it pumped up the big tech names as a slower pandemic recovery is good for a digitized world and delays Fed’s unwinding of monetary support that is keeping the Fed Put in place.
Lower interest rates are generally better for growth names over value names. The new flight to quality appears to be to buying FANG stocks instead of U.S. Treasuries, despite all the saber rattling about heightened regulations for tech giants.
With the pandemic unemployment support and rent relief coming to an end soon, and pandemic hospitalizations still high, a hawkish Fed seems seems a remote possibility. As long as institutional capital flows and equites are the only game in town, the wind remains at the stock market's back, sloshing in and out of "reopening" sectors as the news of the end of the pandemic goes from encouraging to discouraging.
The Never Correction
The 10% correction investors have been hoping to pounce on never seems to arrive. Soon, the biggest risk will be sitting on the sidelines for the year-end melt-up on the strength of robust profit growth forecasts, growing share buyback programs and increasing insider buying.
Market Fact:
To date, 490 of the 500 companies in the SPX have reported for the Q2 2021 period, with 422 beating on earnings (86.1%), 53 missing and 15 meeting. Sales estimates for Q2 2021 were up 37.3% from one year ago. Earnings are expected to set a record, as they increased 9.9% from the strong Q1 2021 record and increased 94.5% from the year-over-year (COVID-filled) Q2 2020 period. Source: Source: S&P Dow Jones Indices.
