Solar stocks are rallying, with a boost from China.
China's Solar Industry Group calls on members to crack down on low-price competition to stop a price war. Invesco Solar ETF (TAN) jumped almost 9%. Source: HolgerZ, Bloomberg
BREAKING: TANGIBLE SIGN OF US CONSUMER WEAKNESS?
Target stock, $TGT, falls 8% after reporting weaker than expected earnings with a 3% revenue decline due to consumer weakness. Target's CEO said the decline reflects “continued soft trends in discretionary categories.” The company's store traffic fell by 1.9% less quarter and the average amount spent by customer also fell 1.9%. Consumers bought fewer everyday items like groceries along with fewer discretionary goods. Another sign that consumers are struggling. Source: The Kobeissi Letter
A POSITIVE contrarian signal >>>
EQUITY mutual funds are working on their 82nd straight month of OUTFLOWS. Source: Bloomberg, Eric Balchunas
Bears of Wall Street
Source: Bloomberg
Are large cap stocks losing popularity?
The number of large-cap US long-only funds has decreased by ~40% in 10 years, to its lowest level in decades. Since 2013, the number of large cap funds has declined from ~570 to ~340, according to Bank of America. In addition, active mutual funds have been consistently underperforming the market. More than 90% of actively-managed equity funds underperformed their benchmark in over the last 20 years. In 2023 alone, 60% of all active large-cap US equity funds underperformed the S&P 500. Source: Bank of America, The Kobeissi Letter
Bears are capitulating...
Mike Wilson chief equity strategist of Morgan Stanley has revised his price target of the S&P 500 from 4,500 to 5,400 Notoriously a market bear, he had previously predicted a 15% drop by December for the index. Source: Radar, The Macro Guy, Bloomberg
Do you remember March 2000 ???
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The P/E ratio of Gamestop, $GME, has spiked to a WHOPPING 1,210x
In other words, it costs $1,210 to purchase just $1 of earnings generated by $GME. By comparison, the P/E ratio of Nvidia, $NVDA, is 34x. Meanwhile, $GME is up nearly 400% this month hitting its highest levels in over 2 years. Over 175 million $GME shares were traded on Monday, 30 TIMES the 1-year average, according to Bloomberg. Source: The Kobeissi Letter
