Market Moment
Glen Eagle®: America’s Women-Owned Trading Desk®  
07/19/2021
  • Small Caps Pain: According to a recent BofA Research survey, fund managers are decreasing their investments in small caps. Small caps, which were viewed as beneficiaries of the “reopening” and “reflation” narratives have actually underperformed the market this year by 4.7%. This underperformance seems to be continuing as the small cap index (Russell 2000) has underperformed the S&P500 in each of the last four months.
  • To the Moon: The “easy money” environment is starting impact the private markets as well. A billion dollar valuation for a company (a “unicorn”) used to be a rare feat. Last quarter there were 136 new companies that attained a billion dollar valuation, which is 167% more companies than the last quarterly record. Furthermore, 1 out of every 5 venture dollars during the last quarter was invested into the fintech sector, foreshadowing significant innovation in the future.
  • To the Moon Take Two - The stock market has hit a new all time high 321 times since 2007. During those days when the market hit an all-time high, 75.6% of all stocks were above their 50-day moving average. There had never been a time since the early 2000’s when the stock market achieved an all time high with fewer that 50% of all stock above their 50-day moving average. Last month, however, this happened four times. This shows that the market’s growth is increasingly being led by fewer companies.
  • Quasi-Inflation? Typically, as inflation rises, bond yields also rise. In our current inflationary environment, the 10-year treasury yield actually dropped from 1.77% earlier this year to 1.30%. This counterintuitive movement occurred because 1) Investors believe that the majority of price increases are temporary 2) The percentage of individuals that believe that now is a good time to buy a household item fell to its lowest level since last April, indicating that consumption (and inflation) is not as robust as earlier thought, and 3) foreign investors’ strong appetite for treasuries continues to keep yields low.
 
Reuters - Wall St Week Ahead U.S. small caps waver as reflation trade wobbles
The Irrelevant Investor – There is so much money sloshing around
The Irrelevant Investor - The Stock Market is Outperforming Most Stocks
Bloomberg – The Most Important Number of the Week is 1.30%
 
 


Economic Calendar

Monday: NAHB home builders index (Jul)
Tuesday:Housing starts (Jun), Building permits (Jun)
Wednesday: N/A
Thursday: Existing home sales (Jun), Index of leading economic indicators (Jun)
Friday: Markit Manufacturing PMI (Jul), Markit Services PMI (Jul)
US Futures
S&P 4287 -0.73%
DOW 34,224.00 -0.98%
NASDAQ 14,611.75 -0.40%

World Markets
FTSE 6877.89
-1.86%
NIKKEI 27,652 -1.25%
Hang Seng 27,489.78
-1.84%
Treasuries
3 Mo 0.053%
10YR 1.259%
30 YR 1.882%

Currencies
Euro $1.177
Pound $1.3727
Yen $109.76

Commodities
Gold 1802.50
-0.69%
WTI Crude 69.90 -2.66%
Silver 25.39
-1.59%


Upcoming Earnings Calls

Monday - AN, IBM
Tuesday - SYF, PM, ALLY, NFLX, CMG, UAL
Wednesday - ANTM, JNJ, NDAQ, KO, VZ, LVS, HOG, WHR, TXN, EFX
Thursday -DHR,DHI, T, DOW, BIIB, BX, AAL, DPZ, LUV, UNP, INTC,TWTR, SNAP
Friday - AXB, HON, SLB, KMB



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Glen Eagle Wealth, LLC is a member FINRA and SIPC
This desk commentary is for informational purposes only


Ansie Monaghan
Carol Ann Fernandez

Glen EagleWealth, LLC
4422C Route 27
PO Box 399
Kingston, NJ 08528
(609) 631-8231

Glen Eagle Wealth | www.gleneagleadv.com