Peak Misery: “Everything is Failing”
The market didn’t completely fall apart yesterday — no small feat considering the action we’ve endured following strong rallies over the past two months.
The major averages clawed back from a red open to push into positive territory late Tuesday afternoon. The Dow set the pace with a gain of more than 100 points.
But we probably won’t enjoy a drama-free trading week.
Remember those distracting trade war headlines we mentioned yesterday?
White House economic adviser Larry Kudlow is stirring the pot again, suggesting that Trump and President Xi Jinping “may not be able to resolve their trade fight at a meeting this weekend,” The Wall Street Journal Reports.
I wouldn’t mind the political meddling as much if the stock market looked a little healthier. But after this latest correction, it’s tough to stomach some of this nonsense.
“It hasn’t felt like a bad year, but retrospectively, it’s been a pretty miserable year.”
That quote is courtesy of T. Rowe Price’s Thomas Poullaouec, via The Wall Street Journal. In an eye-opening article published earlier this week, the Journal tackles some scary numbers regarding the poor performance of so many different assets this year.
Some of these stats will blow your mind because they perfectly illustrate why this recent correction has felt so horrible, even though the major averages are all hovering near breakeven on the year.
This one hit me like a ton of bricks:
All told, 90% of the 70 asset classes tracked by Deutsche Bank are posting negative total returns in dollar terms for the year through mid-November. The previous high was in 1920, when 84% of 37 asset classes were negative. Last year, just 1% of asset classes delivered negative returns.
Simply put, there’s nowhere to hide. Stocks, bonds, oil, metals — everything is failing in one big, unified mess…
If you’ve had the guts to peek at a recent 401(k) statement, you probably know exactly how most investors are feeling these days.
Thankfully, we’ve located a couple of trades that have bucked this ugly trend…
As many stocks struggle, one retail name is setting up for gains after holding its ground during the correction.
Select retail stocks are posting sneaky rallies in the face of difficult market conditions.
Crocs Inc. (NASDAQ:CROX) is one of them. We first tuned into the Crocs comeback story this spring after the company beat earnings estimates, booking gains of 23% on a quick trade. Now we’re ready to go back to the well for another shot at fast, double-digit gains.
The stock is now up more than 100% year-to-date. That’s an amazing comeback, especially when you consider how shares have performed during this year’s market weakness.
Earlier this month, I showed you the big payoff: Crocs posted a blowout quarter, helping push shares to a gain of more than 20% on the week to new seven-year highs. Now the stock is consolidating its gains beautifully, giving us a chance to grab shares and ride the next leg of the Crocs rally.
Finally, the solar stock comeback is kicking into high gear.
Solar stocks have had a downright terrible year. After topping out in the spring, the Invesco Solar ETF (NYSE:TAN) dropped a disastrous 30% in just five months to new 52-week lows.
But we began to see signs of life in the solar sector earlier this month. While the FAANGs broke down, solar stocks were setting up for a quick comeback run.
We picked up shares of TAN back on Nov. 6 for a short-term trade. While many tech stocks have struggled this month, key solar players have found their mojo, helping TAN blast out of its yearlong funk.
The solar ETF closed at new two-month highs yesterday, confirming its breakout move it posted earlier this month. Next stop: $22 and beyond!
PS: One more quick note…
“NATIONAL X-SHARES RELEASE DAY” IS ALMOST HERE…
You’ll discover the little-known asset that could have historically turned $500 into $164,400. We’ll send you a link when it gets close — so mark your calendar. We go live TOMORROW.