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Michael Santoli Profile picture
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11 Apr, 5 tweets, 2 min read
The bull market approaches an “all-in” phase. Why not, with the S&P compounding at a 44% annual pace in 2021? Bulls can no longer argue the market’s hated, the public under-invested. But tape action is sturdy, valuation stable. Weekend CNBCPro⁩ column. cnbc.com/2021/04/10/ris…
Brisk stock-fund inflows, collapse in shorting/hedging, rising equity exposures across the board...
Possibly building to a short-term overshoot again, though recent shake outs (one each in late Jan, Feb, March) have been localIzed, easily absorbed the market rotating pretty quickly away from peril...
There has been some alarmed chatter about margin debt surging but in context it’s not at a notable extreme...
And, finally, the YOLO energies are in abeyance. The indiscriminate call-option buying, the SPAC lottery-ticket mania, the ARK-iverse of hyper growth stocks - all way off peak intensity and the broad market has hung in: resilience or sign off buyer’s fatigue. Travel over trading?

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More from @michaelsantoli

Michael Santoli Profile picture
8 Mar
Got a quick #MysteryBroker update.

But first, a reminder of what he was saying coming into 2021 about frothy hyper-growth tech and the cyclical/value rotation...
The #MysteryBroker says, "The speculative tech bubble of 2020-21 has officially burst. The recent crash in speculative tech stocks is not a garden variety correction." Yes, there will be good bounces but for blasted growth tech he sees no real bottom until at least early Fall.
The #MysteryBroker has preferred small-caps and value since last summer, and still does. "This trade is not over and may last a few years," he says.
Read 6 tweets
Michael Santoli Profile picture
6 Mar
The market's now a fight between stocks valued on promises for a transformed future with a high story-to-substance ratio and those set to thrive in a spring-loaded economic boom riding uncorked restlessness. How might it go from here? New @CNBCPro column.

cnbc.com/2021/03/06/liv…
A couple of swatches from the column, discussing the flush in expensive high-concept tech and how the “revenge of the disrupted” stocks might be about a bit more than a mere rotation toward cyclical exposure and neglected value indexes. ImageImage
And boiling things down to a broad-market take, a completed 5% pullback is hard to distinguish from the first leg of something worse. But for now no stress fractures have yet surfaced in credit or the volatility markets. Image
Read 4 tweets
Michael Santoli Profile picture
27 Feb
After a nasty gale tore through the bond market, sending yields flying and upending portfolios, time to look for valuable windfall?
The upshot for equity valuation, the fate of FANG, prospects for dividend-growth and buyback stocks.

New @CNBCPro column.

cnb.cx/2O5OyWi
Not a key impact, but the boost in yields creates a slightly awkward rhetorical challenge to Wall Streeters who lean heavily on relative stock/bond valuation stories to make a bullish equity case. The “Sure, P/Es are rich but the earnings yield’s well above the 10-yr Treasury...”
In reality, there was never anything essential or eternal about the “equity risk premium” or “Fed model” - certainly not as a predictive tool. Absolute valuation has been the key driver of long-term returns (with no forecasting power in the near term).
Read 6 tweets
Michael Santoli Profile picture
22 Feb
The #MysteryBroker reiterates: We’re in “the last phase of the first year of a bull market.” He points to past new bull markets where the first phase lasted a year, plus or minus a month or so. This one, by his lights, started March 23 of last year...
The #MysteryBroker says by the end of April, he expects stocks will enter a period of 3-5 months of “digestion and correction” with likely downside of roughly 15% in the S&P 500...
Coinciding with this shift to a new phase, #MysteryBroker says high-beta and speculative stocks should lose a bit more and value outperformance should solidify...
Read 6 tweets
Michael Santoli Profile picture
20 Feb
The retail-investor rush is charging up the bull run while turning old market patterns staticky. Rising volume on rallies vs. selloffs, surging micro-cap and options turnover, less index-ETF buying, elevated VIX. What's it all mean?

New @CNBCPro column.

cnbc.com/2021/02/20/how…
Yes, as noted last week, my weekend column will now run on CNBC Pro, along with my daily market notes.

Tatses of this week's piece, including the reversal of old market rhythms: Volume way up in a rising market since, and low-priced stocks are killing high-share-price names. ImageImage
JP Morgan shows how small-investors' preference for Big Tech along with small-cap-index has driven a widening gap between a 50-50 Nasdaq-Russell 2000 blend vs. the S&P 500... Image
Read 5 tweets
Michael Santoli Profile picture
4 Jan
The #MysteryBroker says 2021 will be the reverse of 2020 in terms of market winners/losers. "Value, small cap, cyclical, international and equal weighted equity strategies will outperform." Banks over tech, Treasuries will have negative returns, services will outperform goods.
The #MysteryBroker's best guess on the year: "Quick, nasty" 10% correction starting in January, a run to new highs through March/April, extended 10-15% correction into July-Oct., then strong year-end rally. Overall S&P 500 up ~10%, with smaller cap/value sectors doing better.
#MysteryBroker sees much better growth as Covid cases peak soon, inoculation benefits reaped before true herd immunity. Travel, back-to-office revival. Folks will ask why market isn't stronger w/ economy humming - reverse of asking in 2020 why market so strong w/ economy weak.
Read 4 tweets

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