The Federal government released the latest CPI report this morning. It was higher than Wall Street analysts had been predicting. Apparently the cost of housing, which tends to lag other economic indicators, was the culprit. The report itself, and maybe the inflammatory news headlines that followed, appeared to have triggered a bout of computer-generated selling that pushed NASDAQ down by 1.5% at the open and the S&P by slightly less. Stocks have since recovered a bit.
What I find interesting about today so far–I’m writing this just before noon, Eastern time–is that the selling seems to have been concentrated on the most speculative parts of the market. ARKK, for example, was off by 6%+ early in the day.
To me, this suggests two things:
–there’s still a lot of air to come out of names that are all story/no valuation support, or all hat/no cattle, as Texans might say (when they’re not busy denying health care to women), and
–this is a good test for the makeup of our portfolios–especially to see if somehow a bunch of all concept/no valuation names have snuck back into the herd.
I’m about even with NASDAQ this morning. Given that I consider myself an aggressive investor, I’m more than happy with that. In particular, it suggests to me that I haven’t packed too much risk into my holdings. My best stock is NVDA, which is up slightly–so maybe I’m a little too optimistic about my overall risk level. Still, I have several relatively strong stocks and only one real clunker, so I’m at least somewhere in the ballpark I want to play in.
ARKK, in contrast, is off by 3x what Nasdaq is.