A Choppy Market Week

A rough week for the stock market ended with solid gains Friday, after a spate of bearish actions and some negative investor sentiment. Although many investors expect stocks to keep rising, a multitude of factors has continued to weigh down expectations. Investors are contending with ‘lingering’ worries: the property giant Evergrande Group debacle, whether congress can resolve its battles over U.S. spending plans, and the continuing effects of the Delta Variant. The uncertainty from all of ‘that’ has pushed stocks down in September. Starting a ‘new’ quarter does “reset the board” for investors to an extent,… some say. The issues that have dogged the market recently aren’t going to just evaporate. Massive stimulus spending during the pandemic kept the economy afloat, but inflation, supply-chain disruptions, and Covid-19 haven’t disappeared. The Dow Jones Industrial Average- which snapped a five-quarter winning streak Thursday–rose 482 points, or 1.4%, to 34326. The S&P 500 rose nearly 50 points, or 1.1%, to 4367 after the ‘broad stocks index’ closed out its biggest monthly loss since March last year. The technology-focused Nasdaq Composite Index rose 118 points or 0.8% to 14566. U.S. Consumer spending rose 0.8% in August, the Commerce Department said. That ‘pickup’ signals that the U.S. economic recovery is picking up steam heading into autumn, though some analysts warned the gains might be more ‘reflective of inflation’ than actual consumer activity. Surging prices for natural gas in Europe and Asia have intensified, and energy prices are expected to ‘take a toll on growth in the world economy. Oil prices have calmed a bit, leveling in the $75.00 range, although gas futures fell. A Choppy Week in The Market Closed Positive.

Collectables Go Wild…..Pokemon Cards, sports memorabilia, NTF’s and figurines are becoming alternatives investments, like fine art or vintage wines. Many investors point to the recent industry study that showed sports memorabilia have significantly outperformed the S&P 500, and other asset classes over multiyear periods. When a LaBron James rookie card can command $5.2 million, investors and Wall Street…want in, and a piece of the action. Industry tracker Market Deciper estimates the collectibles market will expand to $522 billion by 2028 from $370 billion in 2020. Merritt Hummer, a partner at Bain Capital Ventures says “several factors are driving interest,” Ms. Hummer said. “First, we have significant excess capital from government stimulus programs, some of which is deployed as investment capital into collectibles and other asset classes,” she told IBD. “Second, pandemic-induced ennui is driving people in droves to their phones for entertainment. Third, a search for yield is driving people to invest in more speculative asset classes that may generate attractive investment returns.” After an explosive 2020, which had already been preceded by rapid growth from 2016 to 2019, the collectibles market is continuing to heat up. Meanwhile, basketball has overtaken baseball as the No. 1 sport for trading cards, due in part to its greater international appeal. And soccer is catching up to baseball too. Goldin Auctions, an industry leader in collectibles and memorabilia auctions, took in $220 million in the first half of 2021 vs. $100 million for all of last year. Ken Goldin, the founder of the eponymous auction house, pointed to ESPN’s release last year of the documentary series “The Last Dance,” which chronicles Michael Jordon’s last season with the Chicago Bulls in 1997-98. As the episodes aired last April and May, he said, prices skyrocketed for Jordan cards but also for all basketball-related collectibles. And another driver of interest in collecting cards is the mystique of buying a $5.00 pack of cards, and the …chance to get a card worth thousands!

Lumber Prices Swing Up Again…. with a 40% increase since August. At $625.10 per thousand board feet, lumber futures are nearly as expensive as they were before the pandemic. Analysts say prices need to climb higher to balance supply with demand. That could be a ‘shock’ to builders and other buyers expecting lumber prices to be closer to the $357 that averaged between 2015 and 2019. Lumber’s late-season climb is part of a broad rally in commodities in which natural-gas prices rose 61% in the third quarter and oat futures have been trading at record highs. This year’s lumber bubble pushed futures as high as $1,711.20 and prompted fears of runaway inflation. When it burst, investors and policy-makers, including Federal Reserve Chairman Jerome Powell, pointed to plunging lumber as a sign that the soaring prices that accompanied the economic reopening were the result of kinked suppl\y and would fade with distance from the clumsy start. Only time will tell the settlement of lumber prices.


Dan Ives, Wedbush Securities, IBD Speaking about the massive regulations China is Imposing. “The current regulatory crackdown from Beijing is not going to let up, ultimately causing more of a rotation for investors from the China tech sector to the U.S. tech sector over the coming year in our opinion,” Ives said. “It feels like an episode from ‘The Twilight Zone,’ where no one knows what Big Brother from Beijing is going to do at any given moment,” he added.

Chris Harvey, head of equity-strategy at Wells Fargo Securities. Barron’s (Does) the stock market need to sell off to shock politicians into action?” writes Mr. Harvey. “If substantial progress is not made by mid-October, we think the markets will get into the act.”

Tom Jessop, Fidelity Digital Assets Barron’s (Crypto) has high risk/reward trade-offs, but it should have the effect of diversifying and amplifying returns.”

Janet Yellen, Treasury Secretary, U.S. Barron’s “I think (a debt default) would be catastrophic for the economy and for individual families.”

Max Kelly, Co-founder of cybersecurity firm Redacted Risk Barron’s Right now, the insurance industry is a mess. It is filled with contradictory motivations.”