On April the 1st, 2016, the SPX closed at 2,072. Heading into today, we were down 2 points. No worries, the stocks Gods responded, in kind, catapulting stocks higher–closing the S&P 500 at 2,098 for a gain of roughly 1%.
Bonds went up like gangbusters, up more than 8%. And commodities did exceptionally well, spearheaded by gains in sugar (+28%), natural gas (+28%) and silver (+21%). Fun fact, old man coal is up 47% for 2016.
The worst performing sector, by far, were the airlines, down 26% for Q2–followed by a sundry of retail-mall based stocks. It was a very poor quarter for the U.S. consumer, as the malls are dead and no one shops any longer.
Moving on.
Silver and gold stocks were up 75 and 44%, respectively. All of the cool money managers, like yours truly, is long gold. Oil stocks were up roughly 15-20% and utilities were outsized winners–up nearly 10%.
Whereas Q1 was about recovery and stemming the flow of blood, Q2 was mainly about a return to an inflationary landscape, one rife with debilitating food prices. However, towards the ass end of the quarter, the data got stodgy and BREXIT really messed up our psyche. Banks got demolished, crushed to pieces, off by 5% for Q2. Most of those losses were applied post BREXIT, after many of them outperformed into BREXIT. It was a real death blow.
REITs were big winners, higher by double digits. The main, underlying theme, aside from ramps into the close, was the search for yield. Negative rates, both in Japan and Europe, have caused investors to flood US markets–allocating into stocks and bonds that pay out good, safe, reliable dividends. I don’t see this changing much, unless the dollar comes under considerable weakness and/or european rates soar.
The NASDAQ finished out June, down by 5%. The last time we had a down June of more than 5% was in 2010. In July of 2010, the NASDAQ surged by 7%. Last year the NASDAQ pressed higher by 4.5%, albeit, in a very choppy month.
Things have properly reflated since the March lows. Markets are, once again, at a cross roads. Will we build upon these gains and position stocks into the fall, technically strong? Or will the European uncertainty, coupled with the psychotic negative rate environment, give us more of the same sideways choppy, hair raising, volatility?
Stay tuned. It should be fun.
NOTE: Exodus members, I will give my q2 review in the blog section shortly.
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I had a feeling THEY would negate the brexit drop just had a feeling
wallst themselves have become puppets of course you pathetic weasels
“this really scares shorts” “it really does” “really really scares shorts once&forall”
Awsome read of brexit crash. I love quants.
http://www.zerohedge.com/news/2016-06-30/jpm-head-quant-explains-how-algos-traded-brexit-crash-and-why-he-sees-elevated-risk
That was one of the most wicked reversals of a panic selloff…..since 1999.
Tells me one thing, there’s no Bear there.
There is big money to be made buying selloffs. Expecting Dow 20,000 in 2017.