My friend Phil Pearlman likes to say, “Whenever you think the world is coming to an end, just go for a walk.” I'll be working from the beach over the next week. As for the Invesco QQQ Trust (QQQ), it has been the index ETF struggling the most, highlights JC Parets, founder of AllStarCharts.
I'll also be doing a lot of swimming in the ocean and walking along the sand. I can't thinking of many activities that are as healthy for the mind and the body. Both my parents were born in Cuba. And I grew up in Miami, so this is just how I was raised.
But if you didn't grow up like that, I highly encourage you to swim in the ocean and walk along the beach as much as possible. This is especially true for market participants, with so much on our minds at all times.
Meanwhile, as we discussed on this week's call, we just saw one of the most aggressive rotations of all time – out of Mega-cap US growth stocks and into practically anything else. The S&P 500 fell in Q1. But it was really only two sectors that were down: Technology and Consumer Discretionary. It was the Mega-cap American High-Beta / High-Growth stocks that struggled.
All the other US sectors were up a lot or flat for Q1. Meanwhile, China was up 17%. Latin America was up 14%. Africa was up 13%. And Europe was up 13%. This is while gold and copper both hit new all-time highs.
There are plenty of things working out there, and the US is definitely NOT the envy of the world. The US indices can't keep up with other parts of the world and the US Dollar is getting absolutely destroyed, only accelerating that rotation internationally.
As for the QQQs, they have now closed four consecutive weeks below the big 500 level.
Does this mean the bull market is over? My suspicion is that it hasn't meant that at all. The weight of the evidence has suggested that this is a rotation out of US growth thing and not some massive global credit event. But I'm open to all possibilities. In the meantime, I think we stick with the opportunities that are working.
Don't forget to go for a walk in the beach and jump in the ocean. It's great!
