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One simple Google search of “stock market overvalued” reaffirms why the renewed selling pressure in the markets that ensued on Wednesday, and has continued into Thursday, is justified.
Consider what one instantly comes across in doing such a Google search. The first are stories that upstart Tesla (TSLA) surpassed Ford (F) — the creator of the Model T, after all — in market cap. Now, the money-losing entity that has been known to break promises to investors (mostly on hitting production figures) is closing in on General Motors (GM) as the most valuable automaker. If this doesn’t scream as reckless investing synonymous with market tops, then I might as well retire after an illustrious 14-year career, first in financial services and now in business news.
After digesting that story, another one that pops up is that Amazon‘s (AMZN) stock keeps ripping past all-time highs, on its way to making the tech giant worth $1 trillion in the not too distant future. At least this is somewhat justified, given how Amazon is killing bricks and mortar retailers such as Macy’s (M) and Sears (SHLD) (tired of their PR team calling me to suggest otherwise — give me a break, guys). But, also as a result of indications Amazon has tapped into a new pocket of technological innovation, its delayed high-tech grocery store will be a game-changer if it’s ever opened.
Even still, the run in Amazon’s stock seems too much, given the company’s propensity to put investment ahead of profits and the market potentially approaching correction zone.
Above all else, however, my morning Google search reaffirmed there are dangerous things happening in the market that are going unnoticed. Collectively, they speak to a market that deserves a breather, and could easily get one, given fresh news of a tax reform delay and the Federal Reserve unwinding its balance sheet quicker than planned (there goes the housing market in 2018..).
Insiders are tripping over themselves to dump stock. The ratio of buyers to sellers is now at a 29-year low.
Source: The Wall Street Journal
Companies have issued about $300 billion of debt in the last two years to buy back their stocks, in effect pushing share prices ever higher. This will likely unwind as debt becomes more expensive in a rising interest rate environment.
Corporate profits are not as strong as the market has baked in — nor will they likely get a boost this year from tax reform, as everyone had come to expect.
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And here’s a great Lego set: Hitting stores in June is a Lego set based on the McLaren 720s, reports Motor Authority. Does anything else really need to be said? On a related note, driving a new McLaren was incredibly fun, as TheStreet reported (video below).
— McLaren Automotive (@McLarenAuto) April 4, 2017
The NBA championship ring is still classy: Unlike the gaudy rings handed out to Super Bowl champions, the NBA championship ring has stayed classy through the years — tons of diamonds, but not an overly large ring. CNN offers up a good timeline on how the NBA’s ring has changed through the years.
Dumb millennials: Young millennials (say between 21 and 29 years of age) have a knack for wanting it all right now, but not wanting to put in the time and effort to achieving success. Nor do they tend to understand the sacrifices of the great ones that came before them. The latest example of this is highly touted New York Yankees prospect Clint Frazier, who will start the season in the minor leagues despite batting .308 in spring training. Frazier allegedly asked if the Yankees ever un-retired numbers — he had a keen interest in wearing Mickey Mantle’s No. 7.
Hey, at least the kid has a quick bat.
Why Panera Bread’s founder sold out: TheStreet had a nice chat Wednesday afternoon with Panera Bread (PNRA) founder Ron Shaich on the company’s big deal. Our takeaway: acquirer JAB Holdings could be on the cusp of acquiring many other restaurants, which could be seeking the cover of being private. Who the hell wants to deal with greedy activist investors, ya know?
What’s the deal with these new golf shirts, Nike: Don’t get me wrong, I love to look hip and cool. Any time I play golf, I usually buy a new outfit a week or two in advance. But, what is Nike (NKE) thinking with these new golf shirts to be worn by spokesman Rory McIlroy and Jason Day at the Masters? They look like fitted t-shirts, seeing as they have zero collar. The Masters is known for its tough rules (limited TV commercials, no cellphones allowed), and they should really consider cracking down on this type of attire that is not fitting with such a distinguished tournament.
Give’em hell on-air this weekend, Sir Nick Faldo.
Rory McIlroy (L) and Jason Day (R). Source: Nike
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