latest Rally
- Thread starter Jdesey
- Start date
This week, too, closed green. + 1.87 % on the week.
Every single time this year the SPX has been a good buy at long term support. And every time we go there the usual gang on here is calling for a huge drop within days. It's a great study in human psychology. SPX at 4200 isn't expensive and earnings are still growing. If things change in a proven way then pivot but I'm seeing huge earnings numbers here in Canada.
P/E link : https://insight.factset.com/sp-500-forward-p/e-ratio-falls-below-five-year-average-for-first-time-since-q2-2020#:~:text=Based on this closing price,on that date was 18.5. Clearly not a bubble or sky high valuations like some repeatedly claim on here.
That was before the mkt just skied 10% . Were back to 20 times forward earnings with rates skying and crazy inflation . Earnings will compress and p/e’s compress .Stagflation. I just looked at 30 yr mortgage rates . Borrowing $350 k vs 14 months ago the difference is an mouth dropping $600 a month more . People will pull back from housing but prices won’t fall . Nobody will sell and builders will pull back hard as few will buy those inventory will stay punk . I can make a case based on the factors above were as overvalued as ever .
It's quite possible what the market is seeing is the following:
Emerging markets (Asia) are turning further red, they are already red.
Globalisation coming to an end.
More manufacturing in the future will come out of America and other western countries, less manufacturing from autocratic countries, including possibly India.
The Ukraine war is uniting the west like never before.