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Nick Colas & Jessica Rabe (DataTrek)

@DataTrekMB

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

Well over 1,000 institutional investors from around the world subscribe to the DataTrek Morning Briefing for its actionable and differentiated investment ideas. Try our daily markets newsletter at no charge with our 2-week trial today on !

DataTrek Research: Colas/Rabe Market Newsletter

YOUR DAILY GUIDE TO MARKETS, DATA AND DISRUPTION Wall Street’s Go-To Commentary for Differentiated and Actionable Investment Ideas Start your 2-week FREE trial Subscribe By clicking submit, you agree...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

US inflation has never declined from +5% back to the @federalreserve 's target of 2% without a recession. Since CPI inflation is currently 7.5%, that’s an important if unwelcomed fact to know. Read our full take here: $SPY

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Nick Colas & Jessica Rabe (DataTrek)

4 years

Half of US GDP comes from just 8 states: CA, TX, NY, FL, IL, PA, OH, and NJ. These are the restarts that must go well in order to bring the American economy back quickly. $SPY $IVV $DIA $QQQ

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Nick Colas & Jessica Rabe (DataTrek)

2 years

The @NewYorkFed Global Supply Chain Pressure Index continues to ease, a positive sign. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

1 year

The @NewYorkFed ’s Recession Probabilities model is up to 57%, higher even than going into the 2008 Great Recession. No one seems to care, probably because Fed-induced recessions should have Fed-induced recoveries. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

US corporate bond spreads are still not flashing recession warnings. In fact, they haven’t moved much in 4-6 months. $LQD $HYG $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

DataTrek co-founder Nick Colas was back on @Downtown and @michaelbatnick 's podcast, discussing everything from market volatility and the strong dollar to $TSLA and sustaining vs disruptive innovation. Check it out! $SPY $QQQ

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This is a Hitchcock Horror | TCAF 65

On episode 65 of The Compound and Friends, Nick Colas joins Michael Batnick and Downtown Josh Brown to discuss market volatility, thinking like an algo, the ...

www.youtube.com

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

7 months

DataTrek co-founder Nick Colas was on @herbertong 's Brighter with Herbert Youtube channel discussing the intersection of the auto industry's challenges and Tesla's goals of producing more EVs and achieving autonomous driving. Check it out! $TSLA $F $GM

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EXCLUSIVE: Wall Street Analyst Drops 5 Bombshells on TESLA [Nick...

Nicholas Colas is a 30+ year veteran of Wall Street with experience in equity research, money management and investment banking. Currently running DataTrek R...

www.youtube.com

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

The difference between 2- & 10-year Treasury yields is shrinking quickly. History shows this is a reliable indicator of an impending US recession. It also says we need a clear catalyst to cause that outcome. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

We still want to see the VIX close above 36 before believing there is a trade to the upside in US equities. $SPY $IVV

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 Today’s US equity rally was a sign of market fragility, not strength. The S&P rarely rallies by over 2% in a day in non-stressed market conditions. From 2013 – 2019, for example, there were less than 4 such days in every year. We’ve had 14 already in 2022...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

3 years

$AMZN is investing $10 bn into launching low orbit satellites in late 2022, competing w/ @elonmusk ’s @SpaceX . They're putting Moore’s Law into space, offering high speed internet services at reasonable prices to underserved markets (the classic disruptive innovation paradigm).

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

Kastle Systems (provides office occupancy data) has an interesting chart that shows much of American life has returned to something approaching “normal” (in person attendance at sporting events, air travel, dining out), but office occupancy seriously lags those activities. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

10 months

DataTrek's Nick Colas was on our good friends' @Downtown and @michaelsantoli 's new show on @CNBC this past Friday. They discussed how most equities don't even deliver T-bill returns over the long run. Check it out! $SPY

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Nick Colas & Jessica Rabe (DataTrek)

4 years

@carlquintanilla @neilsedaka Fleetwood Mac 😀

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Nick Colas & Jessica Rabe (DataTrek)

1 year

One-year Treasuries yield more than 2-years by a greater amount than any point since the early 1980s. Every time 1s and 2s invert this much, the Fed moves to neutral and eventually cuts rates. The last 4 times this happened were in 1989, 2000, 2007 and 2019. $SPY $QQQ

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

We still believe WTI crude at $140/barrel is the level to watch as a recession indicator. That would be a double from last summer’s $70/barrel level, and any time since 1970 when oil prices have gone up 2x in a year a #recession has followed in the next 12-18 months. $XLE $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

10 months

The @AtlantaFed GDPNow model is calling for 2.4% growth for Q2 ahead of this week’s report, better than consensus estimates of 1.8%. The model’s error rate has been within 0.2 pts over the last 2 years, so we should hear some good news about the US economy this week. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

8 months

Gasoline demand is falling far more than seasonality suggests it should. Higher prices are only part of the story. The American consumer may be starting to retrench. $PSCE $XLE $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The 1970–1985 period shows gasoline prices correlate strongly w/ turning points in overall inflation. Gas inflation peaked (so far) in Nov. As long as they remain at current levels, headline inflation should be peaking now. But recessions are the only true inflation-killers. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 months

1/2 Earnings growth matters more to stock prices than @federalreserve policy over the longer run. Since 2019, 2-year Treasury yields have gone from 1.6 to 4.7%. S&P 500 earnings are up 46%. The index is up 58% over that time...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

We are at the start of the 5th move lower for the VIX after a high above 30 in the current year. Stocks have always rallied when this happens. Key VIX levels to watch: 24 and 20. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The S&P 500 is not yet “cheap” when viewed through the lens of forward price-earnings multiples. Wall Street analysts’ estimates are too high and must come down. $SPY $IVV

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

1/3 The S&P 500 is up 167% on a price basis over the last decade. Just 23 days account for all those gains, and most were in 2020/2022. Still, just 19 bad days over the same 10 years entirely offset those 23 good ones...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

10 months

After +5 years of running DataTrek, we’ve finally started a YouTube channel. Our co-founder Nick Colas kicks off the first video w/ his “3 Cardinal Rules of Investing". Check it out, and please like and subscribe! Thank you :) $SPY $QQQ via @YouTube

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Our 3 Cardinal Rules of Investing!

In today’s video, DataTrek co-founder Nick Colas shares his “3 Cardinal Rules of Investing” based on what he’s learned during his +30 years on Wall Street, i...

www.youtube.com

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

US corporate bond spreads are not yet at recessionary levels and have been broadly stable since the start of Q3. As with equities, this market is not yet truly worried about sharply lower earnings/cash flows. $HYG $LQD $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

We want to see the VIX stay +30 through Friday (at least) to signal a possible tradeable low. $SPY $IVV

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Nick Colas & Jessica Rabe (DataTrek)

7 months

10-yr Treasuries continue to rise due solely to higher real yields (not inflation expectations). Assuming real yields go to 2 standard deviations above the long run mean, nominal yields should reach 5.2%. That’s not far from today & current momentum says they'll get there quickly

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

Oil prices and US inflation are strongly correlated. If China’s reopening does increase the cost of crude materially, the Fed may have to raise rates higher than the market currently anticipates. That is certainly not the outcome being baked into asset prices currently. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 When the S&P 500 is expected to be more volatile over the near term than the NASDAQ 100, an investable market low is often close by. This was the case in 2009, 2011 and 2020, albeit for different reasons each time...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

1/3 The S&P 500 is down 23.6% YTD through Friday's close, but 9 single days make up that entire decline and more (32 points in total). Most occurred on/around CPI reports or Fed-related events...

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Nick Colas & Jessica Rabe (DataTrek)

1 month

Markets don’t crash when they are overbought; they crash when they are already oversold. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

US companies have been beating analysts’ estimates by ever smaller amounts over the last 4 quarters and by less than pre-pandemic average beat amount percentages. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The CBOE VIX Index closed today at 24, with the current US rally starting when it was 34. Every notable upside move this year has started with a 34/36 VIX and ended when it hit 19 – 24...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The current bear market has taken as much out of the S&P 500 in 6 months as was the case in the first 12 months during the early 2000’s downturn. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The @AtlantaFed ’s GDPNow model has a 2.6% growth estimate for Q3, consistent w/ recent Jobs Reports and yesterday’s ISM Services reading. Remember when Chair Powell said the US economy could take aggressive monetary policy? He may have been too right. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

A few weeks ago our co-founder Nick Colas was on @Downtown & @michaelbatnick 's excellent podcast "The Compound and Friends". It was a wide ranging convo w/ actionable ideas for today's market. Hit the link below. It's absolutely worth your time. $SPY $QQQ

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Never Buy New Lows, Never Short New Highs | TCAF 39

On episode 39 of The Compound & Friends, Michael Batnick, Nick Colas, and Downtown Josh Brown discuss: what it's like working for Steve Cohen, investor confi...

www.youtube.com

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Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 Can we get another bear market rally like the 17 pct S&P move we had from mid-June to mid-August? Many market observers think so. Our answer: only if 2- and 10-year Treasury yields stabilize/decline...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

Markets enthusiastically embraced yesterday’s better than expected CPI report. The long run history of US inflation supports that view, but with a caveat. Yes, once inflation peaks it tends to come down quickly. But there is always a recession helping that trend along. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

$AAPL continues to be a remarkable performer, up 0.5% on Friday even as the NASDAQ fell 1.4%. Market lore has it that investable bottoms happen when the best companies underperform. We agree. If and/or when AAPL does “break”, that'll be one key sign we’re at investable lows. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

1 year

US corporate credit spreads are stable and remain well below prior levels which signaled a looming recession or systematic problems in the US/global banking system. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

The S&P is up 13% from its June 16th lows, the largest bounce of the year. This has taken the VIX to 22, the 2nd lowest close since mid-April. If the VIX goes below 20, we would be concerned markets have become too complacent about ongoing macro uncertainties. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

DataTrek's Nick Colas was on @TheCompoundNews 's TCAF w/ @Downtown Josh Brown & @michaelbatnick . They discussed cryptos, driverless vehicles, investor confidence, bank stocks & what it was like for Nick to work with @StevenACohen2 . Check it out!

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Nick Colas & Jessica Rabe (DataTrek)

1 year

1/2 US equities seem to be ignoring the very real risk of recession, but that’s because they see an economic contraction solving the Pandemic Era’s three most intractable problems: declining labor force productivity, inflation, and aggressive Fed rate policy...

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

Wall Street analysts’ estimates for Q1 2022 S&P 500 earnings have not moved since Sept 2021 & the index is basically unchanged from early in that month. This isn't a coincidence: markets are worried US corporate earnings power has peaked. See here: $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

US gasoline consumption for the 4 weeks ending July 9th was down 8% from a year ago, the worst comp in 2022. Higher prices are clearly crimping consumer spending patterns. $SPY $PSCE $XLE $XLY

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Nick Colas & Jessica Rabe (DataTrek)

1 year

The @stlouisfed ’s Financial Stress Index is at levels consistent with past periods of significant disruption in capital markets. The @NewYorkFed ’s Corporate Bond Distress Index is not. Markets are listening to the former, expecting the @federalreserve to cut rates soon. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

1 month

Good traders cut losses early; great investors wait and add to their best ideas as volatility peaks. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

4 years

Legalizing retail cannabis would go a long way to plugging US state-level budget shortages created by the COVID-19 Crisis. Doing so in NY would cover up to a quarter of its range of projected revenue shortfall from the virus. Read our full take here: $THCX

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Today’s market action was not what we – or anyone else, apparently – was expecting. That tells us investors need to be extremely careful in the coming days. As the old saying goes, “markets crash from oversold – not overbought”. $SPY $IVV $QQQ

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Nick Colas & Jessica Rabe (DataTrek)

11 months

1/2 The surest sign a newborn bull market will make it to robust adulthood is not short-term price returns. It is sector correlations. By that measure, we sit at an important juncture. S&P sector correlations have just now reached average bull market levels (just below 0.8)...

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Nick Colas & Jessica Rabe (DataTrek)

1 year

US corporate bond spreads are back to mid-August levels. Like the VIX, this says markets have grown overly complacent/confident about future cash flows/earnings.

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

11 months

More S&P companies have pre-released positive Q2 earnings than at any point since the post-pandemic bull market. That suggests a good financial reporting season, which starts later this week. $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

2 years

US equities are very volatile because there is a large difference between current valuations and typical recession/worst case scenarios. Even a 50:50 recession outlook and a no-inflation equity multiple (20x) takes the S&P to 3,840 (7% below Friday’s close). $SPY $IVV

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Nick Colas & Jessica Rabe (DataTrek)

4 years

Don’t compare S&P valuations now to 2008/2009. Big Tech ( $AAPL, $MSFT, $GOOG, $FB) is generating $100 billion of incremental annual profits now, 2x the amount lost from Energy. $SPY $IVV $XLE

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

10 months

1/2 Most stocks do not even deliver T-bill returns over the long run, and just 2.4% of stocks around the world are responsible for all the gains in global equities from 1990 to 2020. Those are some of the key findings of an academic paper that’s been making the rounds recently...

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Nick Colas & Jessica Rabe (DataTrek)

6 months

History suggests we don’t need a recession to see inflation decline to 2%. We’ve gone from 9% to 3% without one. Why is the “last mile” any different? $SPY

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@DataTrekMB

Nick Colas & Jessica Rabe (DataTrek)

6 years

@federalreserve Chair Jay Powell spent 5 paragraphs of his @JacksonHole speech on Friday explaining why Alan Greenspan was right to keep rates low from 1995 to 1999. If you want to know why US #stocks rallied to fresh highs on his talk, that’s pretty much all you need to know.

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Nick Colas & Jessica Rabe (DataTrek)

3 months

1/2 In Sept 2023 we wrote that $TSLA should do a $10-$15 bn stock sale to boost its cash balance. The stock is down 24% since then, but this idea is even more relevant now. @elonmusk wants to transition TSLA from an electric & autonomous vehicle company to a disruptive tech

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Nick Colas & Jessica Rabe (DataTrek)

2 years

US gasoline consumption is running 3% lower than last year, a worrisome sign about consumer spending patterns. $XLE $PSCE $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

“It will come back” is not an investment strategy. Broad based equity indices like the S&P 500 do always come back at some point. The names they own and how much they own of them changes over time; that’s why they come back. There's no such guarantee for individual stocks. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

9 months

1/3 S&P 500 sector correlations to the index overall are running well below average, more than 2 standard deviations from the long run mean…

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Nick Colas & Jessica Rabe (DataTrek)

2 years

One of the most asked questions we've received from clients over the last few weeks: When will US stocks bottom? A: When the @federalreserve decides inflation is moving sustainably lower. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 The S&P has only fallen by +3% on 124 out of 16,299 days (0.8%) since the start of 1958 (first full year of data), and we’ve already had 8 such days this year. The only years with more: 2008 (23), 2020 (16) and 2009 (12)...

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Nick Colas & Jessica Rabe (DataTrek)

1 year

1/2 Rest of world (ROW) stocks have just posted a rare 1-year outperformance relative to the S&P 500. This has only happened 3 other times since the Financial Crisis...

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Nick Colas & Jessica Rabe (DataTrek)

1 year

US corporate bond spreads (IG: 130 bp, HY: 439 bp) are very close their 2015 – 2019 average (133 bp, 456 bp). Like equities, this market is not discounting a recession. $LQD $HYG $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

$AAPL has been outperforming $TSLA on a rolling 50-day basis since early October, a sign that investor interest in disruptive tech companies is waning in favor of “safer” alternatives. $SPY $XLK $XLY

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Nick Colas & Jessica Rabe (DataTrek)

10 months

1/2 Most equities do not even deliver T-bill returns over the long run, and just 2.4% of stocks around the world are responsible for all the gains in global equities from 1990-2020. Those are some of the key findings of an academic paper that’s been making the rounds recently...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Since 2012, the S&P 500 has bottomed at 14x (post Great Recession) to 16x (2018, 2020) trailing 12-month earnings. The latter implies a price target of 3,456. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Lately we've been watching how the VIX trades intraday. If stocks are selling off and the VIX gets to 32 – 33, we start looking for a reversal higher. If we are not at a +32 VIX, we tend to not trust any intraday rallies. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

1 year

The @NewYorkFed Recession Probability model now puts 38% odds on a US recession in the next 12 months. This understates the real probability which, based on +60 years of history, is now close to 100%. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

1 month

$TSLA is down 40% since we first recommended that the company do an equity offering to shore up its cash balances. There is still time to do a transaction.

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Nick Colas & Jessica Rabe (DataTrek)

2 years

The @NewYorkFed 's Recession Probabilities model shows 25% odds of a downturn in the next year. Since 1990, every time this model has shown 25% odds a recession has followed. “Real feel” recession odds are therefore closer to 100%. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

6 months

The S&P 500 has returned an average of 29% over any given 3-yr period since 1974 w/ an 82% win rate. As long as US public companies & capital markets continue to focus on profit growth & innovation, we expect the S&P will perform similarly over the next 36 months. $SPY $IVV

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Nick Colas & Jessica Rabe (DataTrek)

11 months

1/2 The Treasury yield curve is once again shouting “recession”, but US labor markets remain a powerful counterweight to that view. The last time 3m/10yr and 2yr/10yr spreads were this inverted was the late 70s/early 80s...

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Nick Colas & Jessica Rabe (DataTrek)

1 year

US consumer inflation expectations continue to come down, and 3-year forward estimates are even back to 2018 levels. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

1 year

Markets continue to be convinced the Fed is nearly or entirely done raising rates. Odds of rate cuts by year end are currently 89%. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

DataTrek's Nick Colas: "As much as equity markets might not like it in the near term, seeing 10-year yields continue to rise would be a very healthy long-term signal about the state of the U.S. economy." @business @luwangnyc @VildanaHajric $SPY

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Stocks as Inflation Hedge Is New Catch-All Narrative for a Rally

Call them brazen, call them naïve, but stock investors are giving no sign of being daunted by the hottest inflation in decades or the accompanying surge in bond yields.

www.bloomberg.com

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Shelter, Food & Gas make up half of headline CPI. If someone tells you some retailers discounting clothes will have any measurably effect on CPI, ignore them. Retailers could give clothes away for free & US inflation would still be +5%. See here: $SPY

CPI Inflation Primer - DataTrek Research

There’s a lot of attention on Friday’s US Consumer Price Index inflation report, and with that focus we’ve seen quite a bit of commentary that betrays a lack of understanding about how this measure...

datatrekresearch.com

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Nick Colas & Jessica Rabe (DataTrek)

1 year

1/3 The idea that US stocks reliably compound at 10-11% on a total return basis is only right over extremely long timeframes. Over a 20-year holding horizon back to 1928, nominal/real returns have been as low as 2.4/0.6 % or as high as 17.7/13.7%...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Friday’s US Jobs Report showed that Production/Nonsupervisory wage inflation is running 6.5%. 1970s history shows it needs to come down to 4% before PCE/CPI inflation can decline. $SPY $QQQ

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Nick Colas & Jessica Rabe (DataTrek)

4 months

S&P sector correlations to the index suggest the current rally in US large caps can continue over the near term. Current levels are nowhere near the warning track of an imminent pullback. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

11 months

The S&P 500 is trading rich to its 5-year average forward PE multiple (18.9x vs. 18.6x). All of this is due to Tech, where PE multiples stand at 27.2x versus a 5-year mean of 22.4x. $SPY $XLK

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Nick Colas & Jessica Rabe (DataTrek)

3 years

US Google searches for “invest” and “buy stocks” are now back to pre-pandemic levels, a very bad omen for “meme stocks”. Bubbles need fresh money, or they deflate. Quickly. $SPY $AMC $GME $CLOV

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Nick Colas & Jessica Rabe (DataTrek)

5 months

Can the S&P 500 rally another +20% in 2024? History suggests it can, if we get a “baby” version of 1982/1983 (lower rates) and 1995 – 1999 (enthusiasm over new technology). $SPY

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Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 Wall Street analysts expect most S&P sectors to show aggregate negative earnings growth vs last year when companies report Q3 results over the next few weeks. Even still, net margins should still be quite strong (+12%)...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

21% of the S&P 500 has reported calendar Q2 results. 68% of reporting companies have beaten Wall Street earnings estimates. This is below the 1-year average (81%) as well as 5-year (77%) and 10-year (72%) averages. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

6 months

S&P 500 earnings per share have gone nowhere for 2 years ($220-$221/share). That’s why the index now trades for almost the same price as Nov 28th, 2021 (4,538 then, 4,550 now). Wall Street analysts expect the S&P to earn $246/share in 2024, 11% more than this year. $SPY $IVV

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Nick Colas & Jessica Rabe (DataTrek)

2 years

1/2 US large cap Growth stocks have underperformed large cap Value by a statistically unusual amount (2 standard deviations) over the last 50 days. When this has happened in the past, Growth went on to outperform...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

$TSLA has unperformed $AAPL by 14 pct points over the last 50 days. That tells us investor confidence in disruptive tech is low. Recent history says it can go lower still. We would be cautious with “spec tech” names here, especially as we are heading into earnings season. $ARKK

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Nick Colas & Jessica Rabe (DataTrek)

2 years

DataTrek's Nick Colas: "Simply put, strong 1-day S&P rallies (+2%) are NOT the sign of a healthy market.” @MarketWatch $SPY @jsadinolfi

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'This is not healthy': The latest advance for stocks could signal more pain ahead for markets....

As tempting as it might be to call a bottom in stocks, Nicholas Colas, co-founder of DataTrek Research, said Tuesday that investors should brace for more...

www.marketwatch.com

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Nick Colas & Jessica Rabe (DataTrek)

4 years

DataTrek co-founder Jessica Rabe: “there’s a simple and effective solution for states and cities to help cover their huge budget shortfalls after the #COVID19 pandemic subsides: legalize recreational sales of #marijuana .” @ewolffmann @YahooFinance $MJ

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Coronavirus could accelerate US cannabis legalization

States like New York will see significant revenue shortfalls due to coronavirus. Legalizing cannabis could make up for a quarter of the losses, which could help push legislation forward.

finance.yahoo.com

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Nick Colas & Jessica Rabe (DataTrek)

2 years

A comparison to 2000 – 2002 shows the VIX is trading very similarly to that bear market. Bottoms happen when the VIX stays above 30 and peaks +40. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

7 months

1/2 The shape of the Treasury yield curve is widely considered to be a good indicator of US recession risk. Unemployment has a reputation as a lagging indicator. The truth is that they move together. Combining the two is a better approach than relying on just one...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

Two-year Treasuries yield 0.33 pct points more than 5-years, an anomalously large spread. History back to 1985 shows that every time this happens 2-years/Fed rate policy is at a peak. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

6 months

Even with the rally off the October lows, S&P sector correlations remain slightly above average. This implies the S&P 500 is well positioned for further gains this month. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

3 months

1/2 The S&P 500 trades for 20x forward earnings, a level it has only hit in 2 other periods over the last 25 years: the dot com bubble & the post-pandemic bull market...

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Nick Colas & Jessica Rabe (DataTrek)

2 years

The CBOE VIX Index closed yesterday at 24. The current US equity rally started when it was 34. Every notable upside move in 2022 has started with a 34/36 VIX and ended when it hit 19/24. $SPY

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Nick Colas & Jessica Rabe (DataTrek)

10 months

1/2 In the 1980s, investment advisors could put most/all their clients’ capital in nothing but risk-free 30-year Treasuries and still make a 5%/year real (after inflation) return. A whole cottage industry, populated by “bond daddies”, did just that...

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Nick Colas & Jessica Rabe (DataTrek)

7 months

1/2 The S&P crossed into correction territory on Friday, down 10.3% from the July 31st highs. Earnings are not the problem. Long term rates have been, but now they share the spotlight with geopolitical concerns...

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