MACRO
The S&P 500 finished higher by 25 basis points to close at 3,141 yesterday. It is hard to complain about anything when it comes to how the market has performed in 2019. I can’t think of many people that were calling for the S&P 500 to have this stunning rise this year.
I may have been one of the few, saying on December 31, 2018, that the S&P 500 would finish the year at 3,000, a gain of 20% at the time. Then, I increased that view, perhaps by as early as March, maybe earlier, saying the S&P 500 could rise to 3,200 in 2019. I noted it at the beginning of April, for sure, and while we haven’t reached that magic number yet. Being less than 2% away is for all intents and purposes within a margin of error, especially since the S&P was nearly 10% lower at the beginning of April than its current level. I have tried to remain focused all year, with a long-term perspective in mind, and for the most part, it has helped me get through the year. If the year ended on November 25, I would find myself beating the S&P 500 total return index by more than 1% after accounting for fees and transaction costs. Unfortunately, the year isn’t over, and as we all know, one month in the market might as well be an eternity.
Still, there is one reason why the stock market may have even further to climb. Unperformance. Eureka Hedge tracks hedge funds, and based on their data through the end of October, their Hedge Fund Index, which tracks more than 2,500 funds, was up just 6.3%. That compares to an S&P 500 total return index that was up 23.6%. There are a lot of active managers out there that need to boost their returns and close the gap between themselves and the index. These managers are likely adding to some of the better-performing groups and stocks. It at very least will show that they were in the game, and perhaps it could help even to close some of the gap. It could be one reason why hot sectors stay hot through year-end.
STOCKS
ALIBABA (BABA)
Alibaba (NYSE:BABA) is starting to move again, now that its HK listing is priced, $201 looks to be the next significant level to watch for.
MASTERCARD (MA)
Mastercard (NYSE:MA) has had an impressive run and could be heading back to its highs at $295, and potentially higher. The RSI has broken free of a downtrend and suggests that the stocks rally may only be starting.
AMAZON (AMZN)
Amazon (NASDAQ:AMZN) is very close to a break out at $1800, and the RSI is turning higher too. Layer in some bullish options betting, and the stock looks like it may ready to climb back to $1900.
STARBUCKS (SBUX)
Starbucks (NASDAQ:SBUX) looks like a stock that wants to go higher, based on that RSI. The next level to watch for is $87.25
MICROSOFT (MSFT)
Microsoft (NASDAQ:MSFT) has hit our $152.90 target or thereabout. The question is, what now? Put it on my lists of things to do.
