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“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving the good society.” – Robert J. Shiller
While you were on vacation over the long weekend, global risk assets continued to rally around the world. The most notable of these advances may have been bitcoin, which rallied right through this morning and briefly touched $50K before pulling back a bit in the time since. While it may have been nothing more than a coincidence, we couldn’t help but notice seeing headlines from St. Louis Fed President Bullard saying that the FOMC isn’t even thinking about thinking about raising interest rates interspersed with headlines regarding Bitcoin’s topping of $50K. In economic news this morning, the only data point was the Empire Manufacturing report which came in at twice the consensus forecast (12.1 vs 6.0), so the manufacturing sector appears to remain strong.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, economic data out of the UK, an update on the latest national and international COVID trends, and much more.
It was another strong week for global equities last week. While small caps led the way in the US, every US index ETF that we track in our Trend Analyzer tool posted positive returns. Micro-Caps, as measured by IWC surged 3.85%, but large and mega-cap ETFs were all up less than 1.5%. While the gains are fun if you’re long, market rallies inevitably cause short-term overbought conditions, and that’s exactly the environment we find ourselves heading into the holiday-shortened week. Every index ETF we track is currently at least at overbought conditions and seven are at ‘extreme’ levels. These types of overbought conditions ultimately need to be worked off through either a correction in time or price, and that’s why seven of the ETFs have timing scores that rank as ‘Poor’ while the rest are all neutral.