Mike Santoli's market notes: Forced to chase, bankrupt Hertz jumps, VIX signaling caution?

  • Upside inertia continues to carry this market. No new drivers, just continuation of the recent dynamics: Lack of any news to slow reopening momentum, investors feeling forced to increase bets on a recovery through still-depressed cyclical stocks, technical momentum as the index clears resistance and a sense that these forces can last a while before any adverse impact from infection acceleration or a "lower ceiling" on a post-reopening economy.
  • All of this has the laggard cyclicals leading again, in particular the clutch of deeply hurt travel/retail names that the speculative crowd has decided are winning lottery tickets on Americans unleashed. This remains a market in which every orphan stock is taken in. But is it with a foster family or a permanent home? Cruise lines up another 11%, Gap ahead by another 8%, SL Green Realty as an office play. Bankrupt Hertz and distressed Party City (which is offering to swap 20% of its equity and new debt to bondholders to avert bankruptcy) are seeing their single-digit-dollar stocks surge. Fun while it lasts, painful when it stops.