Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business
since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Party party party. This is what US equity investors look like.
If US equities are reacting to the money supply punch bowl, this party is going to last much longer.
The Fed may be taking the punch bowl away, but it is a slow process. In the meantime, the ECB and the BOJ keep bringing out more punch.
Markets may finally be so globally connected that the Fed isn’t the only party host anymore. Hold this thought for a bit….
This rally in US stocks is remarkable. Earnings season and strong guidance are the media’s go-to reasons to explain the latest leg in the rally but I don’t buy it. Valuations are stretched, even if you re-boost earnings and revenue expectations. The fundamental case to buy stocks is weak. Equities march higher every day though and news headlines aren’t at work. The tape climbs and the climb is retroactively explained with nondescript justifications that aren’t new.
Q: “Why are we rallying?”
A: Earnings season
A: Tax reform
A: Strengthening economy
A: Weakening Dollar