In today’s Morning Newsletter Keith McCullough wrote, “While it might work in disruptive technologies, devaluing history, time, and cycles rarely works in Macro… ‘so’, let’s embrace the uncertainty born out of these measurable risk factors and get on with Q3.”
As Q2 month-end markups end today and as June stands as one of the lowest equity volume months in U.S. we wanted to know what your thoughts were heading into the third quarter.
Today’s Poll Question Asked: Are you bullish or bearish on U.S. equities for the third quarter?
In the video below Director of Research Daryl Jones highlights the top three reasons why he is decidedly BEARISH on U.S. Equities for the third quarter.
At the time of this post, 51% voted BULLISH, 49% voted for BEARISH.
Those who would are optimistic about what the third quarter holds and are BULLISH on U.S. Equities had this to say:
- Hard to be bearish on the equity market as a whole. There are certain sectors that are significantly outperforming. Record amount of assets under management, easing Fed, life is good when investing with other people's money. I'll buy all the stocks with VIX at 10, as long as I get paid. Greed is good.
- Consumer spending compares get easier in 2H (the second half of the year). The worst performing stocks in the market through six months have almost all been consumer discretionary. If this group simply ceases to be putrid, it should be positive on the margin for the broader market.
- Until the Fed stops propping up the market, I can't bet against it. I don’t want to fight the Fed.
Voters who are BEARISH on U.S. Equities for 3Q reasoned:
- Bearish for a 10% reversion to mean without hurting major uptrend. Reasons: XLY:XLU ratio trending sideways to downward on 1 month, 4-6 month and 1 yr period, all while JNK:TLT outperformance has slowed on those same periods.
- Too much complacency out there, no volume, inflation cutting into consumer spending, growth forecasts being revised downward with room for consensus to continue to chase growth to the downside with future revisions...
- Inflation creeping up, economy slowing down, jobs being created are not permanent, increasing disconnection between stock prices and economic reality... see and increasing movement of funds to commodities.
- The third quarter contains September which historically is the worst month for the markets - so sideways trading in light volume until the tick down in Sept.