Republic Risk: The Real "Thing" Driving the Markets

It's not multiple expansion that's pushing this market. It's something else... and we haven't seen its power in some time.

Equity Storm Watch Is YELLOW on the S&P 500 and GREEN on the Russell 2000

Futures are setting a positive tone this morning as the market turns its attention to earnings reports from the first two of the Magnificent 7, Alphabet (GOOG) and Tesla (TSLA), due later today.

This is “high” earnings season, and as I’ve noted in recent commentary, it’s earnings that are driving the market and not “multiple expansion.”

I’ll explain that term in a moment… As I noted, the floor for the Nasdaq 100 appears to be the 50-day moving average. Again, there is just TOO much capital sloshing around.

If someone is telling you that the market will crash right now… I want you to clearly think about this. Crises in the financial markets are driven by a LACK OF LIQUIDITY - not investor confidence. There’s no shortage of quant funds and machines that are powering the market. Those machines don’t care.

They don’t think like you or me. They are driven by momentum and someone willing to refill the arcade machine. So -…