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Trade Brains

Even during the 2008 Financial Crisis, cash never yielded higher than S&P 500 earnings. And the gap between the SP500 earnings yield and cash is widening. Competition from cash and bond yields versus stocks keeps rising. For a USD-reference account investor, here's the median Return by Asset Class: 1. High Yield Savings Accounts: 5.5% 2. 6-Month Treasury Bill Yield: 5.0% 3. Investment Property Cap Rate: 4.5% 4. S&P 500 Earnings Yield: 4.2% Bottomm-line: Cash and Treasury Bills are now paying a HIGHER yield than real estate and the S&P 500. In other words, risky assets are paying less than risk-free assets, i.e taking a risk is compensated LESS than just holding cash. Source: The Kobeissi Letter

Netflix shares popped more than 12% after the closing bell Wednesday as the company reported a boost in subscriber growth driven by a password-sharing crackdown efforts and interest in its new ad-supported tier. The streaming giant added 8.76 million global subscribers during the quarter, higher than 5.49 million Wall Street had expected, according to estimates from Street Account. It’s the biggest quarterly net add total for the company since second-quarter 2020, when Netflix added 10.1 million. Source: App Economy Insights, CNBC

Tesla reported adjusted earnings of 66 cents per share versus 73 cents expected. Total operating margin came in at 7.6%, down significantly from the year-ago quarter’s figure of 17.2%. Shares rose more than 2% in after hours trading. Source: App Economy Insights

"I know many traders, non of them are rich, most of them are stressed out of their minds. I know many long-term investors, many of them are rich, most of them live a peaceful life". Source: Invest in Assets

A similar boom/bust head & shoulders already happened in the recent past... Source: Bloomberg, www.zerohedge.com

By Brian Feroldi

Source: Brian Feroldi