Gene Peroni's Daily Podcast

From the Dow’s recently set all-time highs above 35,000 to where the Doe closed last Friday amounted to about 4.8% – which is just within the boundary of what I describe as a garden-variety retreat. 

When it comes to the Fed, words – at times – can speak louder than actions. This has played out over the years when the Fed’s words have reigned in the markets. 

The Fed’s announcement on Wednesday that it plans to raise rates in 2023 triggered a scramble among portfolio managers to realign portfolios given the announcement.

In my opinion, one of the better things to come out of the financial crisis was the transparency from the Fed. 

Two events for the market to consider or grapple with today: the Fed concludes its 2-day meeting and the summit meeting between Putin & Biden. 

With energy coming back into the leadership fold in 2021, “THEM” (Technology, Healthcare, Energy and Manufacturing) is back and doing very well. 

Years ago I would refer to the market’s core leadership as “THEM” – Technology, Healthcare, Energy and Manufacturing. 

The stock market is a good guide or a good filter for what might be relevant to what is being reported on the financial papers.

A year-to-date score card finds the DJIA up about 13%, beating the S&P 500 by ~100 basis points but trouncing the Nasdaq which is up by ~5.6% YTD. 

CBOE Volatility Index had been hovering in a support range at the 16/17 area; not surprising to see it rallying this morning above the 18 level. 

June began where May left off; I’m referring to the way in which the market rallies early and then surrenders the lion’s share of its gains by the closing bell. 

Today marked the unofficial beginning of the summer session. As of last Friday’s close, the Dow is within about 1,500 points of Doe 36,000 which had been my previous target. 

Demographics argue strongly for the healthcare theme. 84,000 Americans are 100 years old or older and in the coming decade about a quarter of the population will be 65 or older. 

Yesterday’s trading action was the latest example of a market that is bound by its trading range.

The fear factor is ebbing on Wall Street, at least as depicted in the action in the VIX. 

Momentum sectors may be finding their technical groove; a number of stocks representing areas such as consumer discretionary, healthcare and technology seem to be moving back toward their short-term trend lines. 

The net money flow is starting to turn more positive for a number of stocks that that had been under pressure. 

Market action along the lines of what we saw yesterday, is likely to be more of the norm than the exception over the short term. 

Stocks down this morning after yesterday’s session where gains sputtered later in the session. A confluence of factors I think are contributing to today’s weakness… 

Inflation is the chatter up and down Wall Street and is becoming more evident in recent weeks; but for the market, inflation started to come back into the picture as early as late 2019. 

This bull market cycle has long history of “down and dirty retreats.” Sometimes these declines can be explained and other times…not so much. 

The CBOE Volatility Index is retreating to the 21 level this morning, after tapping the 28 level just the other day. 

“Sell in May and go away” is playing out in 2021, but I don’t look for a big retreat here – maybe 3-5% using 32,000 as a downside for the Dow. 

It’s been some time since we’ve seen the Dow correct to any significant degree, and for that matter, the general market as well. I think a 3-5% pullback is definitely a possibility here.