April 30, 2021
Good morning,
Gosh, for a big news week, where just about every number or comment went the Bull’s way – monster numbers out to bellwether big techs, a Fed meeting that ended so dovish that market participants are in disbelief of the Fed’s disbelief and economic numbers “beating or meeting” at every turn – the S&P looks to open this morning virtually unchanged from last Friday’s close.
Hmmm – it’s only 1wk but this week’s change in market psychology is undeniable. Could the anticipation of month end rebalancing today (net equity selling expected) play some role in this week’s not-very-good reaction to very good news? Perhaps, but at best this is another week of sideways action and if this week’s change in psychology lasts then a correction with negative numbers attached to it may lie ahead – damn, just as we enter May. (whispering now) – “Sell in May and go away”? We’ll have to wait and see.
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Recently, many of you have had heard me talk about real estate as a fixed income substitute. I’m certain you’ve found those conversations insightful because all I’ve done is channel Stuart’s own thoughts on the subject. No more channeling – attached is Stuart’s recent piece on Real Estate – it’s a very worthwhile read. Enjoy!