Not a great setup. There are too many articles and postings about how we are overdoing artificial intelligence, and how there’s not enough substance to justify recent market moves. There’s no question that the market, particularly the Nasdaq , has rallied endlessly on what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe ‘s (ADBE) putting them to use; so is Meta Platforms (META) but we don’t know how; as are Microsoft (MSFT), Alphabet ‘s (GOOGL) Google and, most importantly, Oracle (ORCL); but don’t forget Broadcom (AVGO) and Marvell (MVRL). That’s worrisome, indeed. That’s why I am approaching this shortened week with a little trepidation There’s really nothing new that I can see short of analyst meetings from Samsara (IOT) and MongoDB (MDB), both loved, but both a little abstruse. They can’t move the needle. So, it seems to me this is the test week. Research right now is of no hope whatsoever. If a stock is up, we get price target boosts. If it is down, we get cuts. Nothing original, nothing against the grain. That’s been a major source of sustenance for a while now, but I think that we have had enough of it so perhaps that causes a pause. No matter, I think we get a pause, and we still don’t have a replacement for the AI theme. Do we go health care following President Joe Biden’s first campaign rally? Getting tougher. Financials ahead of the Federal Deposit Insurance Corporation penalties? Possibly, and a bunch of regional banks seem interesting. Have you seen that yield and price-to-earnings multiple on Truist, a truly good regional bank? The consumer-packaged-goods segment has been written off as past tense : Campbell ‘s (CPB) last quarter may be the template. Retail’s tough as nails: only Walmart (WMT) and Costco (COST) seem to pass muster. Transports? You are on your own because I think the Street is anxious to end the spell of revenge travel. How many times can you re-recommend the cruise ships? The industrials have been going up on the same thing for weeks now – a prospective Chinese stimulus plan that has not yet arrived and, perhaps, the Democrats’ infrastructure plan. I am not going to hide in oil and gas because I will be discovered in plain sight. Of course, there’s some hyperbole here, and heaven knows I am given to it. Still, I am worried about this week because for the first time in a bit I think we need to do some serious digesting. No, I just feel we have come to the point where I have more ideas to sell than buy. When I scan the market, I see many charts that are extended where, even though I like them, I wouldn’t be comfortable buying them. I am mindful that a stock like that of Adobe had a huge move into an excellent quarter and then raced up the hill even more on the numbers, supercharged by AI. That in itself is pretty amazing. But then, out of nowhere, sellers emerged and reversed much of the move. There’s some real fluff in the tape. I see fluff in a lot of places, maybe all but in the pathetic oils which seem to need a re-fill of the Strategic Petroleum Reserve pronto. At times like these, what I like to do is reflect on what it would take to put new money to work. We know now that we got no interest-rate hike from the Federal Reserve last week because the central bank seemingly didn’t know what to do – too many disparate folks trying to hammer out something they couldn’t, so why not postpone? But as I have been saying, we can’t seem to get unemployment up and wage growth down. The Fed knows you can’t get the stickiest part of inflation – rentals – down without more layoffs. We have them in tech and now finance, but not enough to make people abandon their homes or move back with their folks. That’s why I think they are really playing for time. They need more homes built, and they need the homebuilders to lose their discipline. To that I say, good luck. But what matters is that I feel we are fresh out of catalysts to go higher and that most stocks just don’t seem to be at levels that make sense to purchase. Why not just wait? That’s a tough one for most of us. We will want to jump at the first sign of a price break for fear of missing out. Yet, that, again, is worrisome. We don’t want to fear missing out. We want to buy things we want at our prices or else. Are these the prices we want for Microsoft? For Nvidia? So, let’s wait and see. I am willing to miss a percentage or two, maybe even three, to see if we can’t get a better basis on our stocks if we want to buy some. Given the market is officially overbought, I think I will wait until we have a couple of days down before it’s worth pulling the trigger. (Jim Cramer’s Charitable Trust is long NVDA, META, MSFT, GOOGL, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Not a great setup. There are too many articles and postings about how we are overdoing artificial intelligence, and how there’s not enough substance to justify recent market moves.
There’s no question that the market, particularly the Nasdaq, has rallied endlessly on what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe‘s (ADBE) putting them to use; so is Meta Platforms (META) but we don’t know how; as are Microsoft (MSFT), Alphabet‘s (GOOGL) Google and, most importantly, Oracle (ORCL); but don’t forget Broadcom (AVGO) and Marvell (MVRL).
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