In today’s trading session, the S&P 500 (SPY briefly made new, all-time highs before slightly backing off. Currently, we are about 10 points below these highs. In the short-term, it seems that any dips are likely to be shallow and buying opportunities. This is due to a continued strong earnings season, fund manager positioning, and seasonality. One potential concern is that inflation has remained stubbornly elevated and begun to materially impact some companies’ results. Overall, there’s been little impact in terms of EPS growth and margins, however if the situation continues to get worse, it’s only a matter of time before it starts to negatively affect results and outlooks on an economy-wide scale. In today’s commentary, I want to cover earnings season and discuss this potential threat. Then, I will discuss some themes I find intriguing into year-end. Read on below to find out more….(Please enjoy this updated version of my weekly commentary published October 21, 2021 from the POWR Stocks Under $10 newsletter).
Over the last week, the S&P 500 is up by more than 3%. Melt-up is an appropriate description as stocks have either moved higher or gone sideways. Any dip has been aggressively bought and resulted in higher highs.
Our portfolio has also done well and is now up nearly 10%, while the S&P 500 is up only 1.5% since we began the service on September 13. We continue to be positioned for a broad-based, market rally that should lead to trending moves in multiple sectors.