Good morning. The S&P is trading just a few percentage points away from new all time record highs, despite a backdrop littered with excuses to sell.
There is no doubt about it. Negativity about the market continues. The Inverted yield curve, China trade war, the endless recession talk... the list goes on and on.
Even when we were hitting record high after record high a little over a month ago, these highs were met with skepticism, disbelief, and calls for a nasty market collapse. Those cries and calls for downside are not from individuals/investors long the market. Ironically enough, the same people calling for a market collapse have been doing so the last ten years.
And yet here we are.... just percentage points away from new all time record highs.... go figure.
While calling for an imminent market crash the last 10 years, and adjusting those giant red arrows to the right every step along the way, might get you frequent appearances on your favorite financial news channel, it has been terribly wrong the last ten years. Rest assured when this market finally does roll over, those throwing the proverbial shit at the wall, will be dubbed the ones who called it, despite being soiled from head to toe.
And yet here we are.... just percentage points away from new all time record highs.... go figure.
I wrote about it at the end of August, and at the start of September. The market was consolidating in the $282 - $294 SPY range of which it has now broken higher from.
The central banks are signalling for of the same. Which has done wonders for equity prices.
We can blame the FED and every Central bank for what carnage possibly lies ahead... perhaps 5-10 or even 20 years down the road. But if we've learned anything since the FED opened the Pandora's box in March 2009, its do not fight it.
Low interest rates keeps the share buyback machines well oiled. Passive investing in retirement accounts, Central Banks buying equities, dividend yields on Dow components higher than 10 year treasury yields. All reasons why the stock market remains well bid.
And while those uber bears have been busy scaring people out of the market the last 10+ years, corporations have been buying back their stock regardless of what Trump is tweeting. Passive investors and retirement accounts (think 401ks and the like) don't care what the inverted yield means for equities. They are buying when the market is up or down.
And yet here we are.... just percentage points away from new all time record highs.... go figure.
We hit new record highs in 2018 and everyone said the market was too complacent as the VIX dropped under 9.
We hit new record highs earlier this year and everyone said there were only a few leaders moving the market higher.
We are near new record highs again and FANG is not leading the market. The VIX is over 15, not exactly a complacent reading.... what's the complaint this time?
I still think those new record highs are coming. And likely, as they did earlier this year, they may come quicker than ever... and with it the bearish cries will again reach a fever pitch. There will be no confetti. No celebrations. And as far as I am concerned that bodes well for more gains for this market.