Breadth expands as SPX within 1% of ATH, plus consumer sentiment, quant wizard passes away, and 🧁 weekend sprinkles 🧁
Breadth expands as SPX within 1% of ATH, plus consumer sentiment, quant wizard passes away, and 🧁 weekend sprinkles 🧁
The Sandbox Daily (5.10.2024)
Welcome, Sandbox friends.
Happy Mother’s Day to all the moms out there. We appreciate everything you do, truly. I’m amazed each and every day how much love and strength they possess, the thankless jobs that go unnoticed, and the obstacles they overcome. Without you moms, the world might just stop spinning. For those of you who haven’t purchased a card, flowers, or a small gift, good luck getting off Santa’s naughty list in 2024!!
Today’s Daily discusses:
breadth expands, price is next
consumer sentiment plunges
quant investing pioneer passes away
weekend sprinkles
Let’s dig in.
Markets in review
EQUITIES: Dow +0.32% | S&P 500 +0.16% | Nasdaq 100 -0.03% | Russell 2000 -0.67%
FIXED INCOME: Barclays Agg Bond -0.21% | High Yield -0.16% | 2yr UST 4.871% | 10yr UST 4.501%
COMMODITIES: Brent Crude -1.19% to $82.88/barrel. Gold +1.26% to $2,369.8/oz.
BITCOIN: -2.86% to $60,692
US DOLLAR INDEX: +0.08% to 105.310
CBOE EQUITY PUT/CALL RATIO: 0.55
VIX: -1.10% to 12.55
Quote of the day
“Success in investing is not about being right all the time. It’s about minimizing losses and maximizing gains.”
- Jim Simons, Renaissance Technologies
Breadth expands, price is next
You can’t have a bull market without bulls, or new highs, for that matter. That’s why market technicians look beneath the surface for signs of market health.
The advance-decline (A/D) line is a classic breadth indicator, measuring the number of advancing issues against the number of stocks that declined on the day.
Check out the New York Stock Exchange advance-decline line (lower pane) making new record highs.
This is an improvement in internals and speaks to the strength and broadening participation at the individual stock level. More stocks are going up, not down.
Breadth leads prices, so a new all-time high on the S&P 500 is probable. Given the index is less than 1% from printing a new-all time high, this is hardly a bombastic take.
Source: Grant Hawkridge
Consumer sentiment plunges
The Reuters/University of Michigan Consumer Sentiment Index plunged 9.8 points in the preliminary May survey to 67.4, the lowest level in 6 months and far below the consensus estimate of 76.0.
This was the steepest drop since August 2021 and a 2.4-standard deviation event. Excluding the early months of the pandemic, declines of at least this magnitude have happened only 7 other times since 1978 and have either been associated with recession or slower growth in the near-term.
The decline in sentiment in May was widespread across age, income, and education groups. Consumers expressed growing concerns about inflation, unemployment, and interest rates.
Source: Ned Davis Research
Quant investing pioneer passes away
Jim Simons, the math wizard who founded the most successful quantitative hedge fund of all time, passed away today.
Pioneering mathematical models and algorithms to drive the firm’s investment decisions, Simons embraced computer-oriented trading at Renaissance Technologies well before these tools became popular on Wall Street.
His flagship Medallion Fund celebrated annualized gross returns of 66% (and 39% net) during a period from 1988 to 2018, according to Gregory Zuckerman’s book The Man Who Solved the Market.
Rest in peace.
Source: Wall Street Journal
Weekend sprinkles
Here are the ideas, sights, and sounds that caught my attention this week – perfect for quiet time over the weekend.
Blogs
Oaktree – The Impact of Debt (Howard Marks)
Net Interest – The Biggest Investor in the World (Marc Rubinstein)
Frederik Gieschen – Maslow’s Lighthouse: Strive for Mastery, Not Money (The Alchemy of Money)
McKinsey & Co – Global Private Markets Review 2024 (LINK)
Books
Charles Duhigg – Supercommunicators: How to Unlock the Secret Language of Connection (Amazon)
Podcasts
Facts vs Feelings – Hosts Ryan Detrick & Sonu Varghese are joined by Eddy Elfenbein (Spotify, Apple Podcasts)
The Compound and Friends – Hosts Josh Brown & Michael Batnick are joined by Brian Belski (Spotify, Apple Podcasts)
Movies
Molly’s Game – Jessica Chastain, Idris Elba, Kevin Costner, Jeremy Strong, Michael Cera (IMDB)
The American – George Clooney (IMDB)
Music
Bob Marley – Is this Love (LVNDSCAPE REMIX) (Spotify, Apple Music)
Post Malone & Morgan Wallen – I Had Some Help (Spotify, Apple Music)
Kings of Leon – Closer (Spotify, Apple Music)
Lupe Fiasco – AUTOBOTO (Spotify, Apple Music)
Pop Culture
The Roast of Tom Brady (Netflix)
That’s all for today. Have a great weekend!
Blake
Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.