The Bears Have Been Dead Wrong

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

Climbing Wall of Worry

S&P 500 climbed the wall of worry and briefly broke 4,200 this morning.

Despite the unresolved debt ceiling negotiations, the continuing pressure on regional banks, the disappointing reopening data out of China, and red flags of consumer spending, stocks have ground higher this week.

All the major indexes are higher this morning and the VIX is back down to 16. At the same time, interest rates are staging a major increase across the yield curve with the 2-year now 4.33% and the 10-year 3.71%. There’s now a 40% bet that the Fed increases again in June rather than pauses.

Catch-up Borrowing

There’s new concerns that when the debt ceiling is resolved that there will be large rounds of borrowing by the Treasury to catch up with the restraint they’ve had to pursue since January, which will soak up a lot of liquidity.

Energy is catching a bid as crude is back to $72 and the Strategic Petroleum Reserve has finally started buying. Natural gas is up to $2.64, a level it hasn’t seen since early March. Gold remains well below $2,000 at $1,962 and has been trading down all month on the strength of the US dollar which has been rising all month.

Organized retail theft is in the news, now costing hundreds of millions in losses and hitting many retailers. The thieves sell the stolen goods on Facebook, eBay, and Amazon. The solution isn’t clear but it’s hitting company margins meaningfully and the cost is inevitably borne by legitimate customers.

Dead Wrong Bears

We’ll shortly hear from Jay Powell when he speaks on a “Perspectives on Monetary Policy” panel and we may get some insights. For now, the bears have been dead wrong; even higher yields can’t slow the march of equities as strength begets more strength and investors start coming off the sidelines not wanting to miss out. 

Coffee Beans: Tale as Old as Time.

‘Earliest most complete’ Hebrew Bible got a winning bid of $38 million in an auction at Sotheby’s. The Codex Sassoon is believed to have been written around 900 A.D. by Jewish scholars living in modern-day Israel or Syria. Former U.S. Ambassador to Romania, Alfred H. Moses won the auction on behalf of the American Friends of ANU. Source: UPI. See the full story here.

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