What a couple of weeks!
We had our S&P 500 Death Cross at the Ides (March 15th), as expected but, since then, we have rocketed back over the 200-day moving average with the S&P gaining 10% in two weeks while Oil prices hit $110 and the Fed tightened rates and polar temperatures were 50-70 degrees above normal and 2.5M Ukrainians became refugees while Putin bombs civilian targets AND threatens the West with Nuclear War. Am I missing anything? Oh yes, a new strain of Covid forces shut-downs in China and inflation is getting worse and the Global Economy is slowing.
Why shouldn't the market be rallying? Well, just the reasons above but, as we experienced during our own Portflio Reviews last week – it's hard to let go of our equity positions – mostly because there's nothing better to do with your money and, if you are a Russian Oligarch, where else to move you Billions quickly and quietly other than US Equities?
It is very, very hard to move Billions of Dollars around, especially when you are sanctioned but you can always find some Bankster in some country who's willing to open a new account (or existing acocunts that are happy to trade for you) and AAPL alone, for example, trades 90M shares a day at $174, that's $15.6Bn you can put into AAPL without drawing too much attention. XOM does 20M shares daily at $83, that's $1.66Bn, etc. Thousands of places to hide your money.
In fact, globally, while the US markets were gaining $10Tn, Global Equity Funds had $11.8Bn worth of outflows and Global Bond Markets saw $17Bn worth of outflows – the 7th consecutive week of outflows and the biggest one since $52Bn was removed the week of Feb 16th:
As you can see, on a Global scale, investors are fleeing everything – yet the US markets are going higher. This is NOT a sign of health – it's a sign of panic. We just haven't started to panic – yet. That might change over the weekend as Showtime's EXCELLENT show "The Circus" will be titled "The Nuclear Option" on Sunday. Their coverage of the war has been the best I've seen on TV.
IN PROGRESS
