Keith Schneider | May 09, 2021 05:05AM ET
Last week’s move to new all-time highs in both the S&P 500 (SPY) and the Dow Industrial (DIA) masked deteriorating underpinnings as both the iShares Russell 2000 ETF (IWM) and the Invesco QQQ Trust (QQQ) lagged.
Values stocks led the run-up once again while big cap NASDAQ stocks remained stuck in first gear. In fact, the once leading NASDAQ 100 was down -1.12% for the week, and was lagging on year-to-date performance by more than 6% against other key equity indexes.
Our Alpha rotation model took advantage of the run-up by taking partial profits in SPY and moving up stops. Also noteworthy is the fact that the dollar got smoked, while all commodities ripped higher—including soft commodities, gold and silver.
It’s starting to feel a bit like the 70s, only this time the stakes are higher as central banks, fiat currencies, and the current world order is under attack. Global Government debt verses GDP is at record levels as banks and governments are operating as if the real world is a Monopoly game.
Most disturbing is that the dollar is getting hammered despite rising rates. The Fed is now stuck between a rock and a hard place, as higher rates that are needed to combat inflation could unhinge equities.
Just talk to most Cryptocurrency supporters and they will tell you that Crypto and Blockchain technologies are the perfect replacement for the broken banking system. Of course, do not mention Crypto to Warren or Charlie.
h2 Last week’s highlights/h2
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