There are no dips

WED, APR 21, 2021

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF WED, APR 21, 2021 • 11:02 ET

DJIA		34021.64
		+0.59%	+200.34

S&P 500		4151.81
		+0.41%	+16.87

NASDAQ		13820.60
		+0.25%	+34.33

EDITOR'S NOTE

In case you missed it, I asked Bill Miller on the show yesterday about the shriveling up of major short-selling funds (Chanos, for instance, was reportedly down to just $405 million in assets under management at year-end).

Some say it's because these funds bet on the wrong areas of the market--shorting Tesla, for instance, instead of energy and financial plays. Miller sees it a little differently: "It's hard to bet against the market when it goes up 70% of the time," he said. It's why Miller keeps telling people to just stay long.

And Miller, recall, the week before the market bottomed last March came on our show and said it was a once-in-a-generational buying opportunity in stocks. If you hadn't been long before that, he said, get long now. He's been consistently bullish since then, even after the run-up.

The problem is that so many investors who missed the market bottom say they'll wait to "buy the dips" to get back in. But as Brian Reynolds of Reynolds Strategy points out: "How can retail investors be expected to buy the dip when there are no dips?" There were three decent-sized pullbacks early on in the rebound--8% in June, 11% in September, and 9% in October, he said. But since then, we've only had the tiniest, briefest 5% drops in January and February and a 3% drop in March.

In an echo of what we saw during the last expansion, the return of stock buybacks means that even if retail interest wanes during the reopening there will be a huge source of buying support for stocks. This is an extremely important point: Reynolds himself was initially cautious on the rebound because he expected more debt buybacks (because of the borrowing surge to get through the pandemic) than stock buybacks.

But now, stock buybacks are back. Kohl's, he points out, just authorized a bigger one. Kohl's! And the pandemic is still ongoing! Reynolds will be on the show today with more, but he says watch for more buyback announcements as earnings season continues as a gauge of how much demand there will continue to be for stocks.

See you at 1 p.m!

Kelly

Kelly Evans
Twitter: @KellyCNBC

Instagram: @realkellyevans

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