Topley’s Top Ten – November 25, 2019

1.M2 Money Supply Growing at 10.4% Clip Over Last 3 Months.

“Jason DeSana Trennert, who runs Strategas Securities, notes that the M2 money measure—cash, checking, savings deposits, small certificates of deposit, and money-market funds—has been growing at a rapid 10.4% annual clip over the past three months.

Supporting that growth has been the rapid expansion of the Federal Reserve’s balance sheet, which has climbed at a 31% yearly rate over that span. While the Fed says its monthly buying of $60 billion of Treasury bills doesn’t represent quantitative easing—the central bank’s past rounds of securities purchases to stimulate the economy—Trennert calls it a “distinction without difference for owners of risk assets,” such as stocks. The expansion has been international, adds Evercore ISI, which points out that the balance sheets of the European Central Bank and the Bank of Japan also are headed higher.”

M2 money supply monthly chart

https://fred.stlouisfed.org/series/M2NS

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Topley’s Top Ten – November 19, 2019

1.The S&P 500 is up nearly 25% in 2019 and history shows the momentum could carry over to next year

Yun Li@YUNLI626

Gina Francolla

KEY POINTS

  • Going back to 1928, there have been 17 occasions when the S&P 500 has scored an annual gain bigger or equal to 25%.
  • And 71% of the time, the S&P 500 is positive in the following year with an average gain of 7%, a CNBC analysis using FactSet data found.
  • The S&P 500 has only had five negative years following a 25% annual return since 1928.

The record-breaking rally has brought the S&P 500′s return this year to nearly 25%, and if the gains hold up for the rest of the year, the market could have more room to run in 2020 if history is any guide.

Going back to 1928, there have been 17 occasions when the S&P 500 has scored an annual gain bigger or equal to 25%. And 71% of the time, the S&P 500 is positive in the following year with an average gain of 7%, a CNBC analysis using FactSet data found.

The S&P 500 was up 24.5% for the year through Friday’s close. Futures were pointing to some more gains on Monday.

The average is skewed by a 36% loss in 1936 around the Great Depression. Looking at the average performance in the “modern” era from 1950 forward, the average annual performance is a gain of 11.25% for the S&P 500 after a banner year.

The S&P 500 has only had five negative years following a 25% annual return since 1928.

Wall Street strategists and investors have said it’s all coming down to President Donald Trump and the China trade war if the market can close out the year with solid gains. The market has been moving on any development in the U.S.-China trade war for nearly two years.

Optimism on a trade resolution has risen recently after the two countries reached a truce and started working up a so-called phase one deal. White House economic advisor Larry Kudlow said the two countries were “getting close” to reaching a trade deal, sending stocks to new all-time highs.

To be sure, next year could be unpredictable due to the upcoming presidential election. Wall Street is already worried about the ascent of Massachusetts senator Elizabeth Warren and her wealth tax proposals. Notable investors including billionaire Paul Tudor Jones and longtime investor Leon Cooperman have warned of a market correction, should Warren take the White House.

https://www.cnbc.com/2019/11/18/market-has-more-room-to-run-if-sp-500-ends-2019-up-25percent-history-shows.html

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Topley’s Top Ten – November 18, 2019

1.Investors have Sold $230 Billion in Shares this Year Amid a 20% Rise in Global Markets

That said, Citi Says Next Leg in Bull Market Coming as Outflows Turn Around – Investors have sold a net $230 billion in shares this year amid a 20% rise in a gauge of global stocks – That has only happened twice before and when the trend reversed, inflows helped spur another 20% gain over the next year, they said.  “November is on track to be the first month of inflows into emerging and developed market equities funds in two years,” the Citi team wrote. “If they continue, this could add further momentum to the rally.”

From Dave Lutz at Jones Trading

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Topley’s Top Ten – November 13, 2019

1.Per capita liquid milk consumption in the U.S. has declined more than 40% since 1975.

And the company’s deeply distressed 6.5% bonds maturing in March 2023 recently traded at 15.5 cents on the dollar to yield 87.6%, according to IHS Markit. The spread is 8,584 basis points above comparable Treasury yields.

Dean Foods declares bankruptcy …The drop to penny stock.

No. 1 milk company declares bankruptcy amid drop in demand

By MICHELLE CHAPMAN and DEE-ANN DURBINyesterday

https://apnews.com/5eb1173f5e2b4994927bc921f5b49f0e?utm_source=morning_brew
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