Transcript:
Tom Vaughan:
Everybody, welcome to Tuesday, the S&P 500 had a green shirt day today up 2%. Really good day across the board, the NASDAQ was up was really strong day. And the initial catalyst was the retail sales report came out that the retail sales were up point 9% For the month of April, which is quite good. And maybe more importantly, the initial reports from March where retail sales were up point seven, they were revised today to be at 1.4. So twice as much as that was reported back in March. So really good consumer behavior that’s happening here. You know, you never really want to bet against the American consumer, in my opinion, we basically drive global growth sometimes. That’s certainly what’s happening right now. And you know, households are very sound, businesses are sound. So spending is continue to move, we’ll see how that works with inflation, because sometimes that can be inflationary when there’s a lot of spending going on. But it does give possibly some room for the Federal Reserve to push it down on the economy without killing it into recession, in my opinion. So we’ll see how that plays. I think that got things rolling.
Then we had industrial production come out today, which is basically factory output, which was 1.1%, higher in April, that was more than expected, supposed to be a half a percent. So it was pretty good. And then we had news coming out of China that Shanghai reached a three days zero COVID measure, it’s kind of a complicated measure, it has to do with the areas that are outside the quarantine and what have you, but it’s the beginning possibly, of some easing of restrictions there. So the markets thought that was a good thing. Chairman Powell spoke today with the Federal Reserve, there’s a whole host of governors from the Federal Reserve speaking over the over the week, and the market didn’t go down when he spoke, it came up a little bit. So that was a good thing. Because oftentimes, when they do speak, you know, the market does react negatively, we’ll see what happens for the rest of this week. As far as that goes. The last bit of information I thought was very fascinating was Bank of America released a global fund manager survey today. And they found that across the board, these fund managers have more cash on hand, than they’d have all the way back since 911. You know, of 2001. So huge cash on hand, which I think is a lot of fuel, once things get rolling.
So I got to be really careful about getting out in these markets, because things could really roll if those guys start moving back in with that cash. And they’ll have to if the market does start to recover, well, just because again, they’re getting compared to things like the S&P 500 are being indexes that they’re having to keep up with. So, you know, we’ll see what happens there. So we had a great day, you know, on Friday, pretty good day yesterday, really just to hold up. And then you know, a really good day today. And that Bank of America report had one other very interesting thing in it that said that these global fund managers are shorting technology stocks more than they have since 2006. So when you short something, you literally borrow it from an institution, you sell it immediately. And then you’re hoping that it goes down in price, whatever technology stock that might be, and then you’re going to buy it back at some lower price, you make the profit, and you give the stock back. But when the stock goes up, all of a sudden, you’re losing money. And of course, the stock can go up forever. There’s so an unlimited potential loss. And so sometimes you get all of these people that have shorts, kind of buying back that stock, so they can give it back even though they have a loss. They don’t want a bigger loss. That’s what’s called a short squeeze. And we’ve seen that so think about that, when you’re looking at massive cash on the sidelines. And technology being short really heavily. I think that’s one of the areas to look, because, again, if we get some type of a movement up in technology, short squeeze comes, it moves at even higher offset, it looks like we have momentum going. And I think that’s how sometimes you end up with a pretty good run. And so very fascinating what’s going on right now as usual. But altogether, I think things are, you know, going we’ll see what happens. Not sure you know where it’s going from here, but it’s been really nice. A few days here off of that low on Thursday morning, turned out to be a great day to do the rebalance. Obviously, that’s what we did then. So you know, we’ll see how that plays out. But so far, so good. Anyway, look forward to talking to you about what’s happening tomorrow. Thank you