Fiscal Investor Morning Brief (06/09/23)
The S&P 500 reached a new high for 2023, indicating a continued upward movement in the market. Treasury yields are also on the rise, with the 10-year at 3.75% and the 2-year at 4.55%. Carvana (CVNA) experienced a significant surge in stock price, driven by increased consumer borrowing and positive guidance from the company. This rapid rise in Carvana’s stock has led some to compare it to a meme stock, signaling a need for caution.
Upon review, it appears that new money is flowing back into the market, strengthening its overall performance. Carvana’s impressive numbers and future guidance contributed to a remarkable 56% jump in their shares, fueled in part by a short squeeze. It’s worth noting that short squeezes can be profitable, but they also carry risks. DocuSign (DOCU) is another stock displaying strong pre-market performance, adding to the overall exuberance in the market.
While the market currently lacks fear, it’s important to remain cautious due to potential negatives. Factors such as escalating consumer debt and an inverted yield curve, which indicates a risk of recession, warrant attention. Additionally, political events, including former President Trump’s indictment and unrest in Washington, could impact the market. As investors, it is crucial to consider political developments that may affect market conditions, as increased gridlock and controversy can have adverse effects.