(Washington)

Bernie Sanders is struggling to keep his positon as the third most popular candidate in the Democratic primary. Elizabeth Warren seems to have taken a lot of his platform and delivered it more succinctly and less cantankerously. However, Sanders is trying to one-up her and has just announced his own wealth tax plans. Bernie goes further than Warren with a tax that aims to cut net worth of America’s richest by half in the next decade. Sanders further commented on his plan, saying “billionaires should not exist”.

FINSUM: Whatever you think of this plan, we don’t believe this is ultimately going to help Bernie or the Democrats win the general election, as this is likely just too radical for most Americans.

(New York)

It has been a rough several month stretch for stocks and no one seems to have a clear view on where things are headed. All the same fears dog the market now just as they have all year, but at the same time, there seems to be some bullish indicators. Economic signals have been much better recently, which could support a longer bull market. Additionally, so much bearish sentiment has built up that it seems like the market is poised for a big move higher. Finally, the sideways action of the market seems to point to another move higher. Some think the sideways move over the last several months means that this cycle has seen its peak. On the contrary, though, usually late stage bull markets move higher right before an economic downturn.

FINSUM: The market was flat for over a year right in the middle of the bull market and then took a huge move higher. Same situation?

(New York)

Utilities just hit a new high. So what else is new. Utility stocks have been surging this year alongside falling rates, and they are not the only ones. Consumer staples, consumer discretionary and even tech have been rising strongly. Not only do the dividends look appealing, but the stable earnings profile is attractive given the threat of a downturn. What is most impressive is that utilities have held up even though value has been surging. According to Goldman Sachs “With the Fed cutting rates again this week and the 10-year yield at 1.78% [now 1.71%], utilities continue to perform well, despite NT headwinds as broader momentum trades reversed slightly”.

FINSUM: As long as there is downward pressure on rates, we suspect dividend stocks will be strong. But it wouldn’t take much to reverse that.

(San Francisco)

A few weeks ago we were feeling very bearish about the new iPhone and suggested that we thought Apple’s stock might fall. However, we must now admit that we have had a change of heart. The incredibly poor sentiment that preceded the new iPhone’s release has been replaced with cautious optimism. Reviews of the newest suite of phones have been more positive than expected and this replacement cycle seems likely to be significantly better than previously expected. That, combined with the fact that Apple is not staggering release dates of the models this year, means that the stock could see some significant gains.

FINSUM: Everything seemed very gloomy prior to the new iPhone’s release, but that was the perfect environment for an upside surprise.

(New York)

Retail investors are fleeing the stock market, yet it keeps rising. What gives? Bernstein Research just studied this situation and had some interesting findings. Firstly, retail investors’ rotation of out stock funds and into bond funds has been the largest in history, with $1.1 tn flowing out of stocks and into bonds in the last 12 months. Secondly, they found that none of that really matters given the current state of markets, which are being driven by buybacks and M&A. Finally, they found that such outflows are usually a very bullish sign and they generally signal over-pessimism and have often been followed by great returns.

FINSUM: This seems like a very solid counter indicator that things might start turning more positive.