its interesting there are supply side issues in terms of cost happening now, but they are easily passing it to consumers. so most are increasing earnings and thats on the traditional boring companies. i think its also important to point out that the breakdown of the S&P 500 is very different now. the 6 largest stocks make up 25% of the S&P 500 and are all tech related and growing their earnings by a ton. now i’m not saying they are valued correctly, but the fact is they are growing strong. i read some fun fact that superbowl prices for ads, thats traditional ad spending is up 18% in pricing. that shows a very competitive market flushed with cash.
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I’m gonna bet (with real money) that after this friday, the market comes back next week.
Pretty high chance of that so far.
SPX will touch the 100 day moving average on Friday when everyone is rolling their hedges, and then on Monday the buying machines will switch right back on.
Like clockwork.
quad witching friday
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lazy analysis SPY going to the moon bro. Remind me in 5 years #APEDATSHIT
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It’s funny cuz it’s true.
Shorting this market I think is how most of the world gives back their gains.
What would be a major catalyst for a 20% bear market to creep up?
- Delta?
- Inflation?
- Aliens?
Loving the hashtag. 
Can SPY keep climbing? Oh yeah.
Are the market fundamentals there? Oh no.
But such is the market lately lol. Will just need to see what happens. The market is currently disconnected in many respects from fundamentals imho 
Fundamentals, shmundamentals.
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Market fundamentals? You mean the index increasingly dominated by monster companies printing cash and growing like a startup? Yea, pretty poor fundamentals.
“Mix shifts in the S&P 500 and the impacts of Covid-19 on earnings have made
aggregate valuations less informative than at any other time in recent decades. More
than ever, we believe the index has many high-quality companies with attractive
prospects, which has driven it to higher-than-usual multiples but created an attractive
environment for picking Quality stocks. We believe that the actual valuation
environment for the U.S. market, more appropriately measured, is elevated but still in
the realm of the ordinary.”
Spoken like a true analyst not some lazy CAPE wearing super hero wanna be.
Interest rates have been fairly bottomed out since 2010 and the stock market is a main place to earn on that, which coincides with SPY’s steady gains since then also. You can say it in a sentence or you can write a 50 page report with charts. The market will go where it will go, it will be interesting to see if it blinks as interest rates rise or if it just powers through it. Very probably it powers through it, there’s little room for pessimism in the capital markets overall. As exemplified in your analyst’s report excerpt. At the end of the day, quality stocks generally keep going up because there’s more money to invest in the system and quality companies benefit from that. Home prices and costs of living (“transitory” inflation) are also going up steadily at the moment due to supply-demand factors and in regard to home values it’s very tied to interest rates too. But unlike the stock market, the latter 2 are perhaps less beneficial for society overall as a whole. It’s great that homeowners have experienced a huge wealth gain in capital accumulation over the past year (about 17% in my market). But it’s not great for folks who want to buy homes for the first time because prices are going out of reach. With stocks, if you take a long view, the quality ones will always gain. That’s a simple truth behind the adage “time in the market beats timing the market.” The fundamentals and reports since covid often seem like circular reasoning to try to explain around the fact that quality companies are always in demand and there’s ever increasing sums of cheap money needing to be parked somewhere for profit in this low rate environment. The bulk of those proceeds will not be invested in startups or smallcaps of course, but instead will be put into blue chips and the usual suspects with proven management and established market positions. It is what it is, can’t hate on it! Such is the nature of the market. Cheers - take care and have a great day
Keep an eye on those pumpkin futures: I bet the price will rise in October and peak in January.
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My favorite Simpsons quote
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higher prices drive supply. we have a shortage and we need high prices to encourage building.
Building happens regardless. High prices can hurt new construction because downstream suppliers jack up their prices on builders and also items are on massive back order. Plus, the banks aren’t qualifying buyers for more money to keep up with price points, and also aren’t appraising homes at market levels currently (underappraisals are the typical scenario right now), so there is a counterforce at play that constrains new construction right now too. It’s a complex situation honestly which is why builders don’t chase prices with their construction output. The main beneficiaries to all this are the downstream component suppliers not the builders right now, and the banks who are lending on less than 80 percent of true market value for conforming loans because they are underappraising their collateral. I work with new construction on the buy-side. Cheers have a great day👍
i guess i should be more specific. higher prices increases the quantity supplied, not necessarily the supply curve. now the reason why there are higher prices is a demand issue.
what you are talking about maybe that higher prices may cause their input costs to rise since downstream suppliers would want a higher piece of the pie, which would shift the supply curve of homes to the left or a decrease, causing a further increase in price.
banks not qualifying higher price points would be a shift of the demand curve to the left or a decrease, which would push prices lower
anyways combining the 2 would mean a reduction in quanitity supplied and an unknown change in price, because it would depend on the elasticity of the demand and supply curves.
as for builders not benefitting, that is hardly the case.this is the largest builder’s financial for instance.
Applies to spy too
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You are absolutely correct logically and academically. In practice it doesn’t always work out this way. To be clear - in Denver the 17% 12-month price increase is a supply issue. Half as many homes are on the market now compared to prior years according to our MLS data. Because fewer folks can afford to move so they are staying put more than usual, while new home buyers continue to want to buy homes and stop paying rent to landlords. So, banks under appraising has led to buyers bringing more cash to the table, often from their savings or their family. In residential real estate purchase transactions, the appraisal happens about 10 days prior to closing, after your buyer’s deposit has been paid. And in this market to win an offer buyers often need to waive appraisal objections or at minimum offer to cover appraisal gaps of several tens of thousands of dollars.
So it’s either lose the 6-20k deposit depending on the home, or find the money to close the deal. Buyers generally close the deal to avoid losing the deposit plus the 500-800 dollars they also spent on inspection. It’s a bit of a sucker punch at the end of the deal currently, from appraisers. And you don’t know if the sucker punch is coming until your money is in escrow and at risk of loss if you back out.
The top builders have long supply agreements in place so their effect from downstream squeeze is lagging or minimized, and they sell their houses at market prices which gives them more profit for the time being. Smaller builders do not have this bargaining power. But even for larger builders, this is not entirely projectable into the future because they will need to renew their supply agreements at some point. If you go to new construction communities you will not see greatly increased construction generally, regardless of the builder. The builder DR Horton for example, I have many dealings with them on the buy-side, they don’t even offer homes in Denver if you go visit one of their communities. All they can offer you is to sign up for a wait list and whenever they complete a home they send an email lottery out. They are not rising to meet demand they are definitely trailing demand. This is how they work currently, they aren’t even taking walk-in orders, it’s all according to their internal timeline they decide on. Other major builders are similar. In Denver new home construction lags are up to 6-9 months behind usual and it’s not due to increased demand, demand in Denver has been fairly stable. If you visit a new construction community, you are not in a crowd of folks looking at model homes compared to prior years. Total market supply has been halved however - due to fewer people being able to afford to move and stay local here, and new construction being the main game in town with limitations on how they can fill the gaps due to land and building constraints, and their internal market outlooks etc. It’s an odd market scenario right now that I am not really liking as a realtor in case that isn’t totally obvious in my post lol. The American dream of family home ownership is becoming more and more narrow under the current trend so I hope it can reverse. But current homeowners are happy at least, they’ve been killing it on capital appreciation. And landlords are killing it currently due to homes being less affordable than before to larger segments of the population. Studio apartment rents are over 3500 dollars per month in parts of downtown Denver - and we are very much a “B” level city and not an “A” level major economic market for jobs etc. I’d say we should be ticking the top but the market moves regardless of my feelings or predictions, I have learned. Cheers - have a great day
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