Home Investments Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street




“August sentiment is still Buy now or be left behind”— Paul Ebeling

Last week

Investors moved into value trades adding cash into European stocks and financial and material shares last week, wkly statistics showed Friday, keeping the region’s markets on a record-breaking run.

At $1.5-B, Europe saw the biggest inflow in 8 wks while financial stocks saw $2.6-B of inflows, the largest in 10 wks.

European stocks hit new highs Friday and look set to extend gains this wk.

Materials and financials stocks are relatively undervalued now as they are perceived to be still suffering from the VirusCasedemic-induced economic downturn. But, we believe their fortunes will turn as larger economies continue to recover.

Global equity funds enjoyed inflows of $15.7-B as private clients of US investment banks holding $3.2-T+ in assets. BoA increased its allocation to equities to a record high of 65%.

Market participants say the single most important factor for them is what the Fed will do next as it looks to gradually roll back emergency stimulus measures, but inflation data last wk is confusing for market watchers.

Data Thursday showed US producer prices posted their largest annual increase in more than 10 yrs in the 12 months through July, adding pressure on the Fed to reduce stimulus at its next policy meeting in September

The technicals

The PHLX Semiconductor Sector (SOX) looks ready to make a break North. And Friday we saw some very good setups happening. Meanwhile, the big names are marching in place as the rotation continues

This week

We continue to look at the earnings trajectory, it still lends a lot of support to the valuations in the this market.

Earnings are providing comfort and stability.

The MSCI world equity index tracks shares in 50 countries, hit a fresh record high but is mixed Monday.

Earnings continue to grow, the amount of earnings leverage is huge, there are lots of T’s on the sidelines that will come into this market sooner or later.

All of our technical indicators are still Bullish with a Very Bullish bias in here. But pay attention, as 56% of all recommendations on S&P 500 companies at Buy, Wall Street is the most Bullish it has been since Y 2002 that is a contrarian indicator

Stay alert it is your money, so your responsibility.

Have a prosperous week, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.