Michael Santoli
@michaelsantoli
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CNBC Senior Markets Commentator. Markets. Business. Baseball. Cranky New York parochialism.
New York
Joined October 2012
The S&P 500 is up 19.21% since Election Day 2016. On this date in 2013, the S&P 500 had gained 19.24% from Election Day 2012.
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The tape isn't so tough to read. Just imagine there are only four investors in the market: . -Gamma-Squeeze VWAP Gap-Fill Volume-Pocket LLC . -Compounder Wide-Moat Never-Sell Capital Partners . -Macro-Beta Second-Derivative Revision-Momentum & Co. -Low-Info YOLO/FOMO Punters LP.
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Venture capitalists discovering payment for order flow in equity trading: "An app that's free to use but earns revenue by selling users' data - who ever heard of such a travesty?".
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When someone says this market is just like 1999, it helps to mention that in 1999 there were 546 IPOs and their average first-day price gain was 68%. Stuff needs to get a lot crazier in a hurry to merit the comparison.
Paul Tudor Jones says this 'crazy' stock market run reminds him a lot of 'early '99'
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A quick reminder that one reason there are 12 regional Federal Reserve Banks is that in 1913 it was considered important that every financial institution in the country be within one day's train journey from a Fed district bank in order to transport checks and cash efficiently.
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Ferocious rotation at work today, selling the YTD winners hard and buying laggards for a beta grab in case the market can keep running. The ten worst S&P 500 performers today are all up for the year. Lots of profit-taking in defense, pharma/healthcare, insurance.
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The #MysteryBroker says unequivocally that most of tech is in a bubble and near a peak. He notes that a technology or Internet bubble happens every 15-20 years (1968, 1983, 2000, 2020). .
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Mass-muting people who quote Apple's gross cash holdings without netting out its $100 billion debt. .
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"My investment mandate doesn't let me buy Bitcoin but I can own the common and converts of a public company that has made itself into a Bitcoin proxy. ". "My mandate says I can't buy subprime, but if you slice up a pool of bonds to create a triple-A-rated tranche. ". I kid. .
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The cat was already named Tulip at the time of adoption, so can't say for sure if she was named for the 17th-century speculative bubble.
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The #MysteryBroker checks in with a quick tactical observation: . "McClellan Oscillator is at an extreme level that usually precedes strong short-term rallies (a few days to a week or two). Expect a 100- to 200-point rally in S&P 500 very soon." . He emphasizes it's "a very short.
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The #MysteryBroker checks in with an extensive investment-outlook report that blends a benign near-term view with what he sees as a very challenging setup for longer-term stock returns. He was cautious most of last year but turned constructive after the October selloff, says he.
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The #MysteryBroker puts a short-term Sell on stocks at the close, exiting the successful tactical rally call from last Tuesday. Says S&P 500 has retraced 62% of the pullback from intraday high to low, market breadth unimpressive. The paper trail here.
The #MysteryBroker, who called for a 10% correction July 19, issues a tactical Buy for the S&P 500 at 5200 this morning. Playing for a short-term bounce for now, not an "all clear." says will "most likely" need a retest. His initial correction call.
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Finance Twitter must've been intolerable on the day in 1958 when stocks' dividend yield fell below the 10-year Treasury yield for the first time in history. Then stayed there for 50 years.
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âLifestyle. Relationships. Society.â And market timing? . Happy Sunday morning.
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Hard to see how this Apple news isnât already priced in, the stockâs only up 4% the past month.
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The #MysteryBroker goes to a short-term Buy today with the S&P 500 at 5555. He says: "A successful retest of 5400 is enough of a retest and back and fill of the August correction to 5100-5200. Market breadth has overall been good. Tech appears to have bottomed and the rest of.
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Don't worry, it's nothing, I've been assured it's nothing.
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Quick #MysteryBroker update: He continues to give the stock market the benefit of the doubt after having bought back in at 5550 on the S&P 500 a few weeks back. Sees likely further new highs into year-end, adding "the correction [avoided in September] is likely to come in.
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I've noted for months the way the S&P 500 has been tracking the 2021 market path to an unusual degree, at nearly the same absolute levels. The index closed two years ago today at 4361, right there now. First chart is through today, the second is from a month ago.
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On vacation this week but checking in with a quick overnight update from #MysteryBroker. He sees bulls taking a premature victory lap over an economic soft landing. Says weâre well within normal lag time for recession to start late â23/early â24 as heâs been predicting.
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The #MysteryBroker weighs in after Friday's bounce to say it "likely" marked the low for the current phase of the downturn, sees 4-6-week rally totaling 8-15% in S&P 500 based on some rare oversold indicators and persistent bearish sentiment.
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So much bubble talk percolating in this market again, spoken by those who seem not to grasp what a true bubble looks like. (One way to know we're not in a bubble is to observe the swarm of replies to this tweet insisting that we are.). New column.
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The #MysteryBroker, who called for a 10% correction July 19, issues a tactical Buy for the S&P 500 at 5200 this morning. Playing for a short-term bounce for now, not an "all clear." says will "most likely" need a retest. His initial correction call.
The #MysteryBroker looking for a 10%-ish correction. Elevated valuation, no room for multiple expansion, even if earnings estimates are hit into 2025 they'll downshift from there, believes a Trump win is being overvalued by markets in the near term. Adds that "The increase in.
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A very long overnight update from #MysteryBroker details why he remains negative on the market and continues to expect a recession: "Investors have been jumping the gun this year. They are too early trying to anticipate a recovery in the economy and corporate profits.".
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The #MysteryBroker notes the run from the early-August low has been one of the strongest rebounds among 20 or so over 7-12% corrections over the last 35 years. Comparable to the bull-market setback in Oct 2014 (as well as Sept 2001 and March 2020, both bear-market backdrops),.
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Sure, this is when the earthquake hit but I was reacting to the DJIA trying to test its 50-day moving average from below right here.
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A year ago, how many would have signed up enthusiastically for a chance to buy $GOOGL at 17x earnings and a minimal premium to the market? How many today are convinced it's a value trap?
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The work of a pullback in a bull market is to unwind over-aggressive positioning, drain excess optimism, reset expectations and take prices down to meet fundamental buyersâ conviction. Where to things stand in this process after a 5% retreat that has started to flash oversold.
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Tony Dwyer at Canaccord, who's been bullish and has carried a "3300+" S&P 500 target, says this morning he is "withdrawing SPX targets because there is no precedent to how high valuations can go.".
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No it wasn't at the very top, the market ran up another 13% over the next seven months, relax.
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Your S&P 500 index fund first bought $TSLA at $695. Still in the money, for now.
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A long #MysteryBroker update overnight boils down like this: He's very skeptical a new bull market is underway, even though it looks like a long multi-month base in the S&P 500 and we got a classic October bottom/midterm tailwinds with some strong breadth.
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The mild market drop this month has made a loud enough noise to scatter the sparrows a bit. Equity exposure among tactical fund managers in the weekly NAAIM survey hits the lowest level of 2023.
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Forget the other explanations, clearly rallying on the fact that it's now a whole 4 weeks before the next CPI report. Only 55% joking. That plus the extremity of the starting point (6 days down, 50% unwind of post-Covid rally, median bear market loss reached) = "enough for now.".
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For those keeping track, your S&P 500 index fund's breakeven price in $TSLA is $695.
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All those puts bought last week now now fouling the sidewalk behind the NYSEâŠ
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Iâm off this week but did get a #MysteryBroker update overnight. Heâs a buyer into the equity weakness, sees it as essentially a retest of the Jan. 24 low, his sentiment gauge showing a pessimism level last seen near the the late-2018 market low.
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Now vs almost ten years ago, when S&P 500 was under 1700.
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Finally, the standard disclaimer on #MysteryBroker stuff: . He's a source I've quoted for more than a decade since my time at Barron's; is a real person; is not me; is not someone whose name you'd know. I provide the updates as I get them mostly because people ask for them.
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Merge the Dakotas to keep it at an even 50.
House passes bill to make Washington DC the 51st state
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The crash that no one called has investors calling back to earlier cataclysms, grasping for historical threads that can serve as a guide. Plenty say thereâs no relevant precedent, but that shouldnât stop the search for historical touchstones. New column.
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"How can the stock market possibly resume its climb if the US-China trade rift remains 'unresolved' and becomes an indefinite state of mutual hostility and containment, like the Cold War?"
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The #MysteryBroker surfaces with an update. He's been holding, somewhat uncomfortably, to a tactical Buy signal on the S&P 500 from the 4370 level last fall. While he sees no clear catalyst for a bad downturn he's more focused on potential hazards than open running room ahead.
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The #MysteryBroker went to a short-term Sell on stocks at Friday's close. After a 90% surge in S&P 500 in 13 months, expects a tough correction lasting perhaps 3-6 months. Analogous to the deep 2010 correction, which was not previewed by serious divergences or other warnings.
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For those asking after (and dunking on) #MysteryBroker, a quick update. He's "not deterred" from his belief a "vicious rally" is setting up by the S&P 500 giving up the bounce that began last Thursday. Says the S&P filled a gap and indiscriminate selling in "safe" sectors a plus.
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Dialing back in after a week away from the screens, let's see if I have things straight:. -The S&P 500 is up all of 1% over three weeks but folks are acting as if it's on a rocket ride just because it happened to nudge to a new high. .
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A #MysteryBroker update overnight reiterates his bearish stance on stocks and low assessment of the quality of the post-October rebound. He remains upbeat on longer-term Treasuries (called 4% 10-yr yields "a gift" a few times in recent months), expects recession is not far away.
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As the anniversary of the Covid crash bottom nears, the S&P 500 is a whisper from 4000, Dow hits 33K, Disneyland is set to reopen, the VIX prints two closes below 20 after a year above and everyone carried Powell out of his press conference on their shoulders. Good luck to all. .
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Apple, ten years, log scale. Probably means nothing, I'm no trendline whiz, to say the least. $AAPL
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"Stocks fell again Tuesday because a steady stream of back-fitted dual-axis macro charts said that they must. ".
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As Warren Buffett has always said, "Stocks breaking out to a new high are more often a Buy than a Sell, and a cup-and-handle formation can be a powerful bullish technical setup. ". $BRKB
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Happy anniversary to this wild moment.
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Flash sentiment check: When a one-percent intraday dip in the S&P 500 is treated on here as if it were the Battle of Anzio, folks have probably been lulled into thinking the upward grind had become inevitable.
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Lot of people seem pretty excited that gold is up 5% over three-and-a-half years and Bitcoin is almost breakeven over 28 months.
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This kind chart pattern should be called a hernia - little ruptures in the trend wall. If hernias pop back into place they're usually nothing to worry about. If not.
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The #MysteryBroker, who called for a pullback a week ago Friday, says the ongoing correction is "purely technical," likely will still be limited to a 5-10% decline in S&P 500 all told. Over-excited tech cooling off as needed, but he remains upbeat on recovery in the real economy.
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#MysteryBroker says Monday had "all the hallmarks of a capitulation day." The reversal, small-cap outperformance, no late-day fade = possible bottom. Notes January known for brief corrections. With AAII bears > bulls 7 of 9 weeks, rare to see more than a few % further downside.
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Bears, two months ago: "This market pattern is just like late 2008, look for a retest and lower lows.". Bulls: "Irrelevant.". Bulls, now: "This market pattern is tracking the rally off the March 2009 low, new bull market.". Bears: "Irrelevant.".
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A #MysteryBroker update reiterates his negative market stance. He sees a Catch-22: "The only way the Fed lowers rates is either when the core PCE inflation rate falls to 2%, which would be next spring, or if we enter a recession. Either scenario is not good for the stock market.".
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-Stocks at a record.-Bond yields tame.-Yield-curve sloping up.-Credit spreads tight.-Unemployment rate 3.6%.-Wages up 3.2%.-GDP above trend.-VIX at 13 . The obvious question, of course, is how the Fed has gotten it so wrong. .
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On Wall Street, the shutdown will become known as the Immaculate Interruption: long enough to cement the Fed's patience, reveal the economy's resilience, temper investor sentiment and grant Q1 data a blanket mulligan. Not long enough for lasting damage to companies or consumers.
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Can't wait until everyone just passively owns a low-cost index of football players and we no longer have to hear Monday fantasy-league talk.
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The top year-to-date performers in the S&P 500 all heavily for sale today. Pin it to tax payments, heavy-handed rotation or a general "Enough for now" message from the market.
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The only IPO scheduled on the NYSE today. Initial pine offering.
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What are we doing here? Past three days, sellers leave for lunch and don't come back.
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The #MysteryBroker checks in to reiterate his skepticism toward the rally, citing history to suggests a Fed pause isn't generally bullish, often precedes or coincides with recession and in any case the recent 25% S&P 500 gain front-loaded whatever relief such a pause might bring.
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Mr. Met is due to ring the NYSE opening bell tomorrow. A year ago when he visited, the Dow dropped 340 points after a quiet opening. (Not trading advice.).
Itâs all starting to make sense now. The Dow was flat on the day when this guy showed up on the floor.
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An update from the #MysteryBroker arrived overnight, including a review of his 2022 calls and a generally cautious outlook for this year. .
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"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." . -Winston Churchill. "We have a ways to go.". -Jerome Powell.
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The #MysteryBroker still doesn't see S&P 500 breaking below the Sept. low (down ~2% from here). This a retest. Says bull market intact, credit fine and given likelihood of vaccine/medical progress within months, "what happens in the economy in next two months doesn't mean much.".
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Just under a month ago, #MysteryBroker tactically backed off his generally bearish stance on stocks to call for a multi-week relief rally. The S&P 500 managed a few percent of upside to the April high and he's now back to a negative posture on the market.
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Who's ready to suggest $META spending madly into a slowdown to minimize profits fits into a sly long game?. Maybe one way to get government permission to do material acquisitions again is to make a company look like a disrupted basket case rather than market-dominating bully.
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People out there must think a 4-for-1 split means you buy one share and they give you three for free.
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Weâre doing this again? . Bears are yelling â1999â in a crowded tech-led market. Bulls are dancing to the echoes of 1995, the pristine soft landing, when the Fedâ trimmed rates into a ripping equity rally. Assessing the debate. New @CNBCPro column.
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Just about every cycle, the market systematically takes money from those who overplay the market-relevance of electoral politics and gives it to those who understand it's almost never the key driver.
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The #MysteryBroker backs off his call for a fuller correction, now expects stocks to work higher, cites the marketâs âresilienceâ absorbing threats (Delta, debt ceiling, inflation, energy, EPS-forecast dip), near-textbook technical bottoming process and coming seasonal strength.
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âWhy arenât stocks down more?â . Now a popular question that implies the market is too cheery about a recovery. You can rant that the marketâs delusional and rigged, or try to understand whatâs going on within it. Weekend column goes the latter route.
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Short-term tactical call just now from the #MysteryBroker: "The stock market is going to rally 150 to 200 S&P 500 points starting either today or Monday. My technical indicators are short-term at levels that always cause a vicious rally. The shorts are going to be covering.".
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Quick #MysteryBroker update: Still dislikes the risk-reward in stocks, unimpressed with power of the post-Oct. rally, much prefers Treasuries given his view that inflation has downside momentum and economy will soften in coming months as typical policy lag effects start to bite.
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The stock was 80% lower two-and-a-half years after this. You can tell yourself you would've held on or averaged down or loaded up, but fair to assume that not very many did.
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Between Buffett's acquisition of 75m more Apple shares last quarter and the company's repurchase of 137m shares, these two buyers with time horizons of roughly "forever" soaked up 212m shares. That's more than 9% of all the $AAPL shares that traded over those three months.
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That's one of the more symmetrical trips below and back to a 50-day moving average you'll ever see, with the post-close Nvidia-powered pop in Nasdaq 100 futures. Cute.
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The part of the cycle where rich nerds try to buy their way into the cool clique. .
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Spending the day off brushing up on the 1962 bear market, which accompanied no recession but came after a presidential attack on the steel industry and combined a businessmanâs panic, a âflash crashâ and an SEC probe of its causes. Didnât end til after the Cuban Missile Crisis.
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Found the key to the market, time for them to change the locks.
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The S&P 500 this month has formed a classic Back-to-Back-Elephants-Tied-At-The-Tails formation. Means either the market is making a Big Top or the bulls are about to stampede.
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Unforgivable error just now on @SquawkCNBC: I said "Livin' La Vida Loca" was released at the market peak in March 2000. It debuted in fact March 1999, so we had a full year of crazy living after that. @BeckyQuick @SullyCNBC.
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Maybe it can work out fine when a self-regarding SEC-targeted billionaire whom people love to hate buys as a side project a dysfunctional organization that people love to mock. The Mets are 5-2.
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Market getting pretty frisky, S&P 500 High Beta now even with the Low-Volatility basket on a one-year frame. $SPHB $SPLV
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