Bubbles Deflate - Kuby's Commentary 08.02.2021

February 17th, 2021 marked the top of the Chinese stock market, which has subsequently nosedived over 25%, including 8.72% last week. The S&P 500 has gained 12.49% during that time frame. The most recent downturn was triggered by China's decision to have its $100 billion private-tutoring industry operate as nonprofits and have no foreign ownership. The major indexes remain near record levels, but last week there was a modest decline in the market, or perhaps it is more accurate to say there was a decline in Amazon, Apple, Facebook, and Microsoft, as the entire 0.4% decline in the S&P 500 can be attributed to those 4 companies. Corporate earnings continued to dramatically exceed estimates, including the reports from those Mega-Caps. With almost 60% of companies having reported, a record 88% have beaten estimates by an incredible 17.2%. The economic data during the week came in slightly softer than anticipated, with GDP +6.5%, which was nearly 2% below estimates. It is the busiest week of earnings season, with 148 S&P 500 companies reporting results for the second quarter. Investors will be paying particular attention to the forward guidance and any color provided on the cost pressures and pricing power that companies are disclosing. Stocks on the Move: Advanced Micro Devices Inc (AMD), ACCO Brands Corporation (ACCO), PetMed Express Inc (PETS), Consolidated Communications Holdings Inc (CNSL), Westwood Holdings Group Inc (WHG)