Good morning contrarians! It is Friday, June 9. Happy Friday.
State of Play
The S&P 500 (SPY 0.00%↑) officially entered a new bull market yesterday. As of 0630 this morning all looks quiet:
Stock index futures are unchanged with the exception of the Russell 2000 which tracks small caps, down 0.5%;
Commodities aren’t doing anything. WTI crude oil is flat, trading around $71.50/barrel;
Bonds are selling off again. They rallied yesterday after initial jobless claims came in hotter than anticipated. This morning the selling has resumed. The yield on the 2-year is up 5 basis points to 4.57% with the yield on the 10-year up 4bps to 3.75%.
Known Events
Very little going on today. Again.
The US Department of Agriculture publishes World Agricultural Supply and Demand Estimates at 1200. Also known as the WASDE report, this is a monthly forecast of global demand for soft commodities like wheat, corn, etc. This basically makes it the domain of commodity traders, though professional investors will likely take notice because of what it could say for the economy.
That’s all we got today. A quiet summer Friday would appear to be in the offing.
The Bottom Line
At the start of the week we said the dearth of known events would make this a good time to take the psychological pulse of markets. The theory being that with little in the way of new information to distract them, investors would resort to whatever prevailing emotion — fear or greed — that was prevalent.
With the S&P now entering a new bull market it would appear safe to say that greed is the winner. The Nasdaq for its part has been in its own bull market for a couple of months already. These bull markets last about 10 months on average, according to Centerpoint Securities. Of course, past performance is not a guide to future results. There’s no reason we can’t exit the bull market as quickly as we entered it, especially if investors have reason to dial back risk.
Right now, there don’t seem to be very much to motivate them to do so. The debt ceiling stuff is resolved, regional banks are seeing smooth sailing, and the Fed is even going to pause interest rate hikes next week.
Come to think of it, maybe this is the contrarian indicator? You tell me. Have a vote in our Friday poll:
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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A New Bull Market for the S&P 500