Did Corporate Insiders Perfectly Predict the Market Top?

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 25 September 2020

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today on the Brief: Initial U.S. jobless claims up to 870,000 Partial lockdowns begin in earnest in Europe and Israel The global demand for American stocks Our main discussion: Did corporate insiders perfectly time the market top? August saw the largest volume of insider selling since 2015, with more than 1000 corporate officers offloading $6.7B in stock. Subsequently, the market has seen a 10% decline since the S&P500 all time high of Sept. 2. What’s more, according to new statistics, insider selling is happening at the fastest pace since 2012. The question is: What do these executives know that the rest of the market doesn’t?

Transcript

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0:00.0	I think we'd do well to pay attention to what people do, not what they say.
0:05.7	Last month, no matter what people were saying, no matter what the narrative around the
0:09.9	great American recovery was, the leaders of the companies at theoretically the top of that
0:15.6	recovery were selling hand over fist and getting out as fast as they could.
0:21.6	Make of that what you will.
0:24.6	Welcome back to The Breakdown with me, NLW.
0:28.7	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:34.9	The breakdown is sponsored by crypto.com, Bitstamp, and nexo.io, and produced and distributed by
0:41.0	CoinDess. What's going on, guys? It is Thursday, September 24th, and today we are talking about
0:48.6	insider selling and whether corporate insiders perfectly timed the market top.
0:55.4	First up, however, let's do the brief.
0:58.0	First on the brief today, initial jobless claims rose this week.
1:03.1	Every Thursday, we get the jobless claims reports,
1:06.2	which give us a picture of the economy as it's being experienced by the average sort of worker. Economists
1:13.4	expected there to be 840,000 claims this week, and instead we got 870,000 claims, which was
1:20.9	4,000 more than last week. Now, the total number, aka continuing claims, fell, but it fell by less than forecast, and that number
1:30.2	is still twice the high from last recession. These jobless claims are, of course, the inverse flip
1:37.2	side of good news from the stock market, although, as we'll see, the stock market isn't doing
1:42.5	great either. And more than anything,
1:44.8	it suggests that perhaps we're in a different phase of the quote-unquote recovery.
1:49.7	Ryan Sweet from Moody's put it like this. He said, we're getting to that point where the easy
1:54.7	hiring is behind us. This next leg of the recovery is going to be much more driven by the underlying
	...

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