First Word

Strong week and a growing chance the "highs of the year" take place next few weeks...

Greetings.  Equity markets broke out to new highs in November, the 21st month after 20 months of "markets going nowhere" and in this week into Thanksgiving, equities seem to have boosted by new underlying bids. We believe the strength and recent persistent bid reflects the fact that investor positioning remains "uncomfortably" defensive.  This along with strong seasonals supports our view that the S&P 500 likely >3,200 before year-end (perhaps even higher).  The re-positioning towards risk-on is stemming from mounting evidence that 2020 economy > 2019 economy, so this is not simply blind "buying of momentum."  From a timing perspective, we are now starting to suspect that the highs of the year (3,200 or 3,300?) might take place soon, like in the next week or so.  Our conviction is not high on this, and this is also not suggesting economic momentum is faltering.   2019 has shown that economic momentum is not the same as stock price moves.  For most of 2019, economic momentum was weak, PMIs tanked, yet stocks performed admirably. Rather, we believe the faltering of stocks is the absorption of the "FOMO" bid that we have seen since the start of the month.  This is more of a gut observation, rather than a "hig...

Unlock this article with a FREE 30-Day Trial!

An FSI Macro, FSI Crypto, FSI Pro, or FSI Weekly subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free