I guess if it is good enough for Gwyneth Paltrow, then it is good enough for the stock market. A few days ago, the actress and her husband, Chris Martin, announced they are getting a divorce. However, they plan to do it a little differently because she is famous, and better than the others who also failed at marriage. The couple is engaging in something called "conscious uncoupling." When and where, in this day and age, is it not good enough to be a nice person, work hard, and mind your own business, pay your taxes, but also have to prove one is consciously aware?
Moreover, it is one of those euphemisms meaning that one has to acknowledge climate change, and should only eat vegetables and herbs grown in friendly soil. While given encouragement until it is time to pluck the nutritious growth from the earth, and transport onto your dinner plate. If you are ever so inclined to eat meat, be sure it is range-free because there is nothing better than being nice to your food before you kill it. It is a sign you care for people, while you instruct your accountant to find every break possible, as you advocate for higher taxes for rich people; described more often as the income bracket just above your own.
This movement does not stop with private individuals, it is growing like wildfire among business CEOs that now rank being 'consciously aware' is more important than shareholders rights and profits, and even more than customers and products. This movement is a growing threat to capitalism as it leans toward the notion that corporate profits are part of the public domain, and that CEOs should rank their personal beliefs ahead of all other facets of the businesses. Many have gone so far as to harangue shareholders for daring not to share these same beliefs. I am working on this topic, and monitoring it as it continues to unfold.
In addition, the "conscious uncoupling" in the stock market this week is different, more akin to market rotation, but it goes far beyond a shift from one niche in the market into another.
Each of the past five sessions has witnessed intra-day rotations that have seen the NASDAQ and the Russell in free fall, while the Dow and S&P have largely held up. Most of the stocks that have been hit the hardest are high-flyers, due for some kind of stumble. Of course, there are stumbles and there are implosions, and for the most part have been hidden behind the more reasonable declines in the blue chip averages, hence the "conscious uncoupling." However, this is not new, often investors flock to blue chips when high-Beta names get wobbly.
The real question is have investors turned a new leaf, or is this temporary situation much like Chris Martin's never-ending urge for Big Macs, hidden away for 11-years of marriage, except when he was on the road with his band? I would say the short answer is that investors have gotten jittery and selling begets selling, but I have seen signs that the high-flyers are oversold and act as if they are ready to rebound. Still, there is an edge to the market and a sense that there has to be a moment, or event that sparks a reversal.
Those kinds of moments usually do not happen on Fridays, but buyers have made several attempts and have begun easing in throughout yesterday's session.
Putting on the brakes will likely have to be an act of "conscious uncoupling." I am just not sure what will trigger the spark, but this love story is not over yet.