The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
So close.
Futures climbed in the early morning and the S&P opened about +20 points. News and data didn’t affect markets and investors were left to their own devices as a result. The S&P needed to get to 6147 to print a new all-time high and the index was within 20 points by lunch. A push towards the record came at 2 PM and the index approached within 3 points before fading back and trying again in the final hour, coming within 1 point then. Yields fell across the curve and the mood in both stock and bond markets is one of contentment.
New all-time highs matter for mood and outlook. Rightly or wrongly, fresh highs are viewed as confirmation that everything is great plus that things will get *better.* The chart points up so the mood is up and the speculation about the future is overwhelmingly up as well. We’ve seen these environments before and the only extrapolations for revenues, earnings, multiples, and asset prices are…. up.
Perception is reality so this virtuous cycle will continue for a while. What’s our destination? The S&P is up 4% for the year so there’s a lot more upside to enjoy if 2025 is going to be a typical year for a typical bull market. I don’t know if the stock market analysis can be (or should be) reduced to such a degree but we’re in uncharted territory so it’s as good a guestimate method as any.
Bolt-from-the-blue risk remains the only risk and any dips that happen, before a BFTB actually happens, will be bought aggressively. The market is demonstrating groupthink and, sentimentally speaking, we’re on the verge of euphoria.
Prepare for some frothy and momentum-driven action. I’m not sure about the time horizon but certainly the rest of the summer looks like a layup for longs.
See you tomorrow.
-Mike
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