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New All time highs

The S&P500 crossed the 5000 mark this week. Fears of being on a bear market rally have gone away, and the resilience and optimism of this market are remarkable. It doesn’t matter that the #ratecuts odds are falling apart, as you can see below, and that perhaps we may not see one until June. It doesn’t matter that the current earnings season is heavily polarized, with 494 stocks on the index presenting poor earnings growth, or that banks are facing a tough March, where the #btfp needs to be renewed to avert another banking crisis. Perhaps stock buybacks are more important, and are providing the necessary tailwinds to push indices to all time highs. Earnings are departing from price trends, and that’s usually not a good sign. The S&P500 P/E is 22.4, watered down by the non-magnificent components, but the Nasdaq 100 ratio is 31.7. How long will the party last?

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Chart source: Bianco research

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