Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
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Warren Buffett may have officially retired from running Berkshire Hathaway but that didn’t stop him from sharing a few thoughts on the stock market at last weekend’s annual shareholder meeting, telling attendees, “We’ve never had people in a more gambling mood than now.”
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It’s hard to argue with him when the notional value of equity call options being traded on a daily basis on the S&P 500 Index surges above $2 trillion, according to Goldman Sachs.
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As Ruchir Sharma writes, the speculation is not confined to the retail investor class. Institutional investors are jumping on the momentum bandwagon like never before.
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However, the breadth of the rally is concerning to some. “Wall Street’s rebound since late March has been driven by the smallest number of stocks on record, pushing US market concentration to an all-time high and prompting warnings about the ‘fragility’ of the rally,” reports The Financial Times.
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And with corporate cash drying up, as Jim Paulsen writes, investors may soon find that the “technology miracle” driving the stock market could soon begin to struggle.
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