1.Nasdaq Up 9 Quarters in a Row…Again

Sep 26, 2018

The Nasdaq Composite is set to finish higher for the 9th consecutive quarter when exchanges close this Friday, September 28th.  (With a QTD gain of more than 6%, it would take a dramatic plunge over the next two trading days for the quarter to end in the red.)

Below is a chart showing streaks of quarterly gains for the Nasdaq Composite since its inception in 1971.

Nine quarters of gains is not quite the longest streak on record, and it’s not even the longest streak of the last six years!  The longest stretch of quarterly gains made it to ten from Q1 2013 through Q2 2015.  Prior to that, the record was 8 quarters back in the mid-1990s (Q1 1995 through Q4 1996).  Not even during the Dot Com boom of the late 1990s did we see such consistency of gains for the Nasdaq.

While the Nasdaq has been more consistent to the upside during this bull market than it was during its epic late-1990s rally, the size of the quarterly gains seen this time around don’t come close to matching the rallies seen back then.  In the chart below, we show the quarterly price change for the Nasdaq going back to 1971.  Yes, we’ve seen very nice quarterly gains of 5-10% many times during the current bull, but from 1997 through Q1 2000, the Nasdaq posted seven double-digit quarterly percentage gains, including a gain of 29.5% in Q4 1998 and a ridiculous 48.2% gain in Q4 1999.  This period is nothing like the 1990s.

https://www.bespokepremium.com/think-big-blog/nasdaq-up-9-quarters-in-a-row-again/?utm_source=sumome&utm_medium=linkedin&utm_campaign=sumome_share

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1.Emerging Markets Valuation Vs. S&P Back to 2004 Levels.

Emerging Markets: This chart shows the overall EM trailing price-to-earnings ratio vs. the S&P 500 (LTM = “last 12 months”). EM stocks haven’t been this undervalued relative to the US in quite a while.

Source: Deutsche Bank Research

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1.Presidential Cycle Seasonality

LPL notes the next three quarters are historically some of the strongest out of the entire four-year presidential cycle – “going all the way back to when the Dow started trading in 1896, each of the next two quarters have closed higher 73.3% of the time—no other quarter is up more often. In addition, the average returns over the next three quarters have been 4.0%, 5.2%, and 3.6%—again some of the strongest in the four-year cycle”

From Dave Lutz at Jones.

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1.Spread Between 10 Year and S&P Dividend Yield at 7 Year Highs.

Bloombergs note “The yield spread of bonds over the S&P 500’s dividend yield widens out today to 122 bps, the biggest gap since July of 2011, as a rallying S&P 500 has pushed down on the dividend yield.”

From Dave Lutz at Jones Trading

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1.Bitcoin Speculators Switch to Weed.

https://www.marketwatch.com/

I Started My Trading Career in 1997 So Witnessed the Internet Bubble First Hand….This is Textbook 1999 CEO Interview on Jim Cramer…Stock Spikes 90% and Gets Held 5 x in One Day….Bigger Market Cap than General Mills

Tilray’s Wild, Wild Day

If you didn’t know about Tilray before, you definitely do now.

Earlier this week, the Canadian marijuana producer earned approval from the U.S. government to import medicinal cannabis into the U.S. for clinical trials. On Tuesday night, Tilray CEO Brendan Kennedy gave a chest-thumping interview to Jim Cramer.

Then, all hell broke loose.

Yesterday, shares skyrocketed ~90% before erasing most of those gains and briefly dipping into the red. Couple notes:

• The stock was halted from trading five times by Nasdaq due to volatility.
• It ended up 38% for its best day yet as a public company.

Clearly, Tilray has the munchies

During its mega-surge, Tilray at one point yesterday had gobbled up the market cap of food conglomerate General Mills.

Bottom line: Tilray finished the trading day bigger than American Airlines and Clorox, with a market cap close to $20 billion. Look out, Apple. Someone’s coming for that $1 trillion crown.

https://www.morningbrew.com/

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