Mike Zigmont 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

Back to business. The dip-buying, slow-crawl rally continues. It was another quiet news day today and while overseas markets were off 50-100 bips, we printed a small gain. The S&P started down about 6 points, again in sympathy with overseas weakness. The tape lifted slowly and steadily until

10 AM.

That’s when the S&P recovered to unchanged. The pace of appreciation became glacial at that point and we gained a few more points over the rest of the session. Capital flow was light at 96% and that’s all she wrote.

GE announced it would cut its dividend by half and its forward guidance dropped considerably, along with having a lot of uncertainty embedded within it. The dividend chop was widely expected but the negative guidance surprised significantly. The stock dropped about 7% on the day but it did not influence the broader market.

That is really different. GE has been a significant stock since the beginning of the Dow Jones Industrial Average in *

1896.

* Over the past 120 plus years, markets have favored/followed various industries of course. Radio, electronics, conglomerates, computers, info tech, internet, financials, biotech, real estate, social media, etc…. Leadership rotates naturally. But regardless of which group led the market at the time, GE always mattered. It was plugged into the US & Global economy and it was a thermometer for measuring the overall health of the economy and large businesses.

Not today. The market views GE as experiencing idiosyncratic problems and that the world is humming along just fine. GE is perceived as no longer tapping into the global growth narrative.

I’m not going to argue whether that’s proper or not. The fact that the market has stopped looking at GE as a bellwether stock (and business) is the major news item here. For the first time in the history of our stock market GE is unimportant.

It’s worth highlighting this change in the market’s perception even though it’s not relevant to the overall market’s action. I draw no conclusions from it but I think it’s interesting.

See you

tomorrow

,

-Mike