By Barbara Kollmeyer, MarketWatch
Columbia Pictures/ Everett Collection
There is a lot of “August hate” going around lately. It’s hot, the markets are dull, and vacations are rife.
The S&P 500 went sprinting to all-time highs shortly after the opening bell on Monday, then closed 0.1% lower. The Dow industrials did the same, while the Nasdaq managed a 0.2% drop. Pure excitement. We could be in for another one of those days, if stock futures are anything to go by.
It could be worse. We could be suffering through August without Rio Olympics distractions:
But at least the market is going up, says Daily Reckoning’s Greg Guenthner. He says this means we should just ignore the billionaires out there who say flee this market because they — Jeff Gundlach, Bill Gross, Goldman Sachs — are dead wrong.
“I don’t care if you have $100 billion in the bank or if you’re begging for nickels at the bus stop — if you’re fighting the market, you’re gonna get burned,” warns Guenthner .
Jefferies’s chief global equity strategist Sean Darby seemed to echo a bit of that, in a note sent to clients Tuesday. This bull market may be the most unloved on record, but “U.S. market breadth continues to improve, we would not recommend shorting the market,” he says.
Plenty of investors have been jumping on board as U.S. stocks tread north. One popular way to ride along has been the SPY /zigman2/quotes/209901640/composite SPY -1.15% , the world’s biggest ETF. Fans say this S&P 500 tracker can be a no-brainer of an investment, needing no watering while you’re on vacation.
But our call of the day has a nagging worry about index funds, which this investment advisor says are most vulnerable when everyone goes to the beach and junior traders are at the helm.
Our chart of the day checks out the British pound, which stands out in the lackluster crowd this morning as it gets taken down a few pegs.
More summer reading: Mark Hulbert on why you’ve been getting the stock market’s “fear gauge” all wrong.
Key market gauges
Dow and S&P futures are inching higher, and if stocks can get some action going later, they could nail new record closes. Asian markets /zigman2/quotes/211618636/realtime XX:ADOW +0.33% finished slightly up, while Europe /zigman2/quotes/210599654/delayed XX:SXXP -0.66% is also moderately higher. Gold is slipping, while crude oil prices /zigman2/quotes/209726633/delayed CLU26 0.00% are also walking back big gains from Monday as the focus turns to weekly supply data. The dollar /zigman2/quotes/210598269/delayed DXY +0.03% is slipping against the yen, but rising against the British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.4239% .
”I hate August! It is not the hot weather I hate most, but the market shenanigans.” That’s Louis Navellier, chairman and founder of Navellier and Assoc., who says there isn’t much he likes about August and financial markets. But the investment advisor reserves some special ire for ETFs, in his post to the Seeking Alpha blog.
He reminds of us of the time last summer — Aug. 24, 2015 — when the market’s “circuit breakers” stopped trading in 1,278 stocks. He gripes that “the ETF specialists took advantage of that situation for over 90 minutes to pick off unwary investors, by trading ETFs at up to a 35% discount to their underlying net asset value.”
Those “specialists” annoy Navellier to no end, but he’s also worried that with traders on vacation in August, “another ETF shenanigan” will occur, “most likely triggered by an unscrupulous short seller spreading rumors and taking advantage of thin market conditions when most of Europe is on holiday and many folks on Wall Street are also absent.” Read the whole post here .
While you’re at it, check out iBankCoin’s Option Addict , who says the “pain” trade moving forward will be “owning the index or ETF, while nearly every single stock out there has outperformed YTD.”
The British pound is providing what little excitement there is going this morning. Overnight, it sold off against the dollar. Seems there’s talk about more easing to come from the Bank of England or maybe it’s the worsening trade gap. No one is too sure, but the big level of $1.30 /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1594% has been breached, and some say the next big level to watch out for is the post-referendum low of $1.2796.