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🦉 This Week in the Markets
the financial news you need
Al Atencio
September 27, 2024 • Estimated Reading Time: 5 minutes
Welcome to your weekly market wrap-up.
The weekend is almost here, so grab a cup of coffee, get comfortable, and catch up on the financial markets.
I’ve been doing the reading and scrolling, to bring you the most relevant updates.
end of week markets update
1) Equity markets continue to power higher, with the S&P500 making new all-time highs this week. Again 💸
40 new all-time highs for the S&P 500 so far this year
+21% in total
+34% in the past year
From the Covid lows in Mar 2020: +173%
From the GFC bottom in Mar 2009 it's up more than 1,000% (a 10 bagger)
The whole way up ppl have been trying to tell you the world is ending
— Ben Carlson (@awealthofcs)
1:04 PM • Sep 24, 2024
Don’t forget: “The whole way up ppl have been trying to tell you the world is ending”
2) Why is the stock market up so much?
We keep hearing it all depends on the Fed, interest rates, and inflation. But don’t forget it's mostly about companies growing their earnings—no matter what the macro environment.
Why are stocks up 20% two years in a row?
Forward 12 mo EPS has gone from $225 at the start of '23 (when everyone promised us the recession to end all recessions) and it is up to $267 now. This isn't the only reason, but it is a big reason.
— Ryan Detrick, CMT (@RyanDetrick)
8:04 PM • Sep 24, 2024
Breaking down the S&P 500's 20% year-to-date price return:
10.3% comes from earnings growth
9.6% is due to multiple expansion
3) Are the markets getting ahead of themselves? This is what we are all asking.
You might think that future returns will surely be lower—or negative—after such a big move up.
Since 1985, under similar circumstances the market has always been higher a year later🤘
When the S&P 500 has gone up 25% or more in the 12 months before a first rate cut from the Federal Reserve, the market has gone up 100% of the time in the following year. On average, it’s gained about 19%.
This is not a guarantee of anything of course… But I like those odds.
4) The Chinese government finally pushes the BIG stimulus button 🧧
It’s been a bad three years for the Chinese economy.
And a very shitty three years for Chinese equites: With the MSCI China equity index down three years in a row (2021: -21.64%, 2022: -21.8% 2023: -11.04%).
Yet the government has held off from rolling out any serious stimulus…
UNTIL THIS WEEK💥
Is this finally a turning point for China’s stock market❓️ I don’t trust communist governments but who knows…
5) People are buying now and asking questions later: the CSI300, which tracks the top 300 stocks on the Shanghai Stock Exchange, jumped 11% this week. And the Hong Kong Hang Seng Index is up almost 10% as well.
China up another 4% overnight. That's over a 10% rally in China's S&P500 just so far this week alone. In Bull Markets, the laggards catch up to the leaders. Go back and study all the bull markets ever. You'll see. In bear markets, this is not what happens. Go look for yourself.
— J.C. Parets (@allstarcharts)
9:54 AM • Sep 26, 2024
Watch: Hedge fund billionaire David Tepper said on Thursday he’s buying EVERYTHING China - link here.
charts
Will the US stock market have the same returns this century as the last one? 🤞 1,000x!
Gold hits new highs this week, up almost 30% YTD— tracking for its best year in decades 🚀
Gold has been a snooze-fest as an investment for a decade.
What changed: Central banks in emerging markets are buying like crazy - because it can’t be sanctioned 😉
And it seems like retail investors have begun to wake up to what’s going on:
And finally, some parting wisdom:
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria”.
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