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Morning Brief: Why markets appear more placid

In this article:
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Yahoo Finance's Myles Udland breaks down how the stock market is faring amid the pandemic.

Video Transcript

- Find the different Placid.

- Yeah. Look the buyer stepping in there. No more trading, Robert. They're all in on facilely. And to that end, Miles, really enjoy the morning brief newsletter. Like your headline, it is a placid market.

- Yeah. Lake Placid in the market. It might be better to be a Lake Placid than it is to be in the studio. I'll tell you that. It would be nice to be on vacation. Maybe Seana Smith will have us up there.

But no, I think it's interesting to see Goldman coming out. Because David Costa and his team, they publish every Friday night for their clients. And then it gets the media usually. Sometime Saturday or Sunday.

And to come out on a Thursday and raise your price target, tells you the kind of environment that we're in. And so the angle that we took on today's Morning Brief comes to us from our friend Keith Lerner over at Truist. And he notes that we even had a 5% pullback in this market since the fall of last year.

So this is going back a decade. The second longest period that we have had without even a 5% decline in the S&P 500. The only time that exceeds it is 2017. And 2017 with the whole year without a 5% pullback.

And I think it comes back to some conversations we had earlier on in this program. Go back to last Monday. The market, the Dow for what? 2% at the lows. The NASDAQ was down maybe 2%.

It seemed like oh-- oh, here we go. Here we go. And it shows how sensitive everybody is now to those pullbacks. And I think this-- this data explains why.

It has been so long since there has been any kind of index level challenge to the market. Something I highlighted in the story. And I think is something that, in my opinion, we do a good job of discussing on this program.

As you can see in today's market, it hasn't been great for every company in every sector all the time. There have been pockets. Tony Dwyer I think said it best. Role in corrections within the market.

You've seen huge sell offs in reopening plays. You've seen the cyclical trade kind of come and go to some extent. You've seen this rotation around styles and sectors.

But through all that, the S&P 500 has ultimately been up and to the right in some kind of fairly smooth and orderly direction. And so for a retail investor who is mostly maybe playing some individual names, just putting some money away in their retirement account, things are great. Up 70%. Take it. Go home. We'll see you back in 2022.

For portfolio managers who are trying to play trends within the market, where do I want to add size? Take things off. It's been a really challenging year. But the S&P certainly doesn't tell that story.

- I think we started are we talking about a Keith learner and some charts. He-- the guys on fire. But--

- Well, yeah, a lot of-- so yes, Keith is great. We love Keith. Everybody came out over the weekend with their beware of August view. And Keith put his monthly chart book out yesterday.

And had a lot of other great stuff in there. He had a chart I almost wrote about on peak ISM growth. Typically, we see volatility around that. But it doesn't spell the end of the bull run. And I think that's another theme that we've discussed at length on this program and in the Morning Brief.

- But don't you think there is-- there could be a moment of truth brewing for the S&P 500? Look at Etsy. Look at Roku. These are bad stories. These are better-- Even reactions to Uber and Lyft earnings. This is not good.

- Look, no one knows where, you know, what's-- what's the line from-- from "The Wolf of Wall Street," right? No one goes. And the market's going up, down, sideways or in circles. Not Jimmy Buffett or Warren Buffett, right? No one knows. So--

But I think today's action tells you a lot on answering that question in any kind of affirmative way. There is a lot of challenging, or there are a lot of challenging results out there. As you mentioned, as we've discussed, your azziz, that reopening.

Uber, what's going on with ride sharing? Roku, is this growth trend really going to be life so on and so forth? For the market to be basically saying everything's fine on-- to the market actually to take those results, and then go buy cyclicals.

Energy is the outperformer. Today financials are leading along with energy. Consumer-- consumer staples are in the mix there. Like this is a market that says oh, well, if it's bad for Roku, then it's probably good for the overall economy.

So then I'll just buy that stuff instead. And with the S&P now, 11 points away from an intraday record high. I think that tells you everything you need to know or a lot of what you need to know about the character of the market.

You can come with the moment of reckoning all you want. But today, I mean, today is-- today is answering a question. Investors are asking the market a question. What do you think of these results that are disappointing from fast growing companies? And the market is saying, I'm not worried about it. I'm going to buy cyclicals.

- I'm sick for the first earnings report out of Webber. I'm ready for Weber.

- Going back to Webber?

- I'm going back to Webber.

- Go with that back to Webber.