S&P 500 may rally to 4600 by the end of 2023. Will Walmart outshine its peers once again? Will Ron Baron's fund outperform indices once again in the coming decade?
Always hard to predict market movement, even more by a specific date. But if we are really in a bull market, we should test all-time highs at 4,800 in coming months. That would be my target, but 4,600 will be a key resistance on the way!
100%. I think timeframes are very difficult to predict with any form of accuracy. You are right, if we are really in a bull market, we ultimately need to cross the 4600 mark and then create new all time highs over 4800.
I feel like this is 2007/2008 all over again. In 2007 stocks peaked in the fall then dropped in 2008. Today, fiscal stimulus is still working its way through the economy but will end in 2024. QT has not slowed the economy much but its effect will be felt when the fiscal stimulus starts to runs out. I think stocks will peak in the 1st or second quarter of 2024. The question will be, can economy stay propped up until after the election. I believe that both commercial and residential real estate declines will be the cause the economy to tip over. I've been following Melody Wright's substack and what she is finding in real estate is really troubling. Hang on, it should be a wild ride.
Melody Wright is super insightful when it comes to her outlook on the real estate market. And you have brought about some very interesting points. What QT has done is contract bank lending, which is what it was intended to do, though the rapid rise of interest rates (along with it) also mean that banks sit on record level of unrealized losses, which for now, the Fed has a facility for (BFTP) to restore investor confidence and prevent bank runs. Imo, the main driver of inflation in this cycle was fiscal spending, and not bank lending (like in the 1970s) and the Fed unfortunately does not have the necessary tools to quell a fiscal driven inflation, as the one we are facing now. At this point, fiscal spending will continue to add "real economy money" and this may actually keep recession off the bay for as long as possible, because on the consumer side, there are weaknesses arising. Plus, it is rare to have a recession during an election year, so it will be interesting to watch that dynamic.
Like always, amazing insight Amrita😍👍 I also really liked that you mentioned Ron Baron, who is, for me, one of the best investors but somehow gets unnoticed in mainstream media.
I try to follow him whenever he gives an interview and continuously read his investor letters, fund updates, and am amazed by his performance, thought process and the long holding period of each of his investments.
Thank you Oktay for pointing me to his latest investor letter and glad you enjoyed the post. You are right, that he is not highlighted by mainstream media, probably because he is not the typical loud personality that a CNBC or other media outlets love. Actually Bloomberg recently covered his fund and that is when I looked into it properly and realized that his investment style and principles are very much aligned to mine, though, of course, I haven't spent nearly as long as he has in investing and neither am I a billionaire.
I woke up this morning and literally every single news outlet have headlines that soft landing is back. It was not more than a week or two ago, that everyone was talking about bond market meltdown and how that increases the probability of a hard landing. Markets are shifting their narratives so frequently. And yes, you are right about the complacency. Right now, it took some weak economic data as a green light to start roaring again. To me, the underlying fundamentals don't look promising at all. But I am also keeping an open mind, given the sheer amount of fiscal spending that is keeping the economy from falling hard into a recession and the fact that next year is an election year for the US.
I guess we will hear more lower earning, since a lot of short term fires are out and a lot savings programs are already leveraged. Now it’s gets more messy to safe costs inside companies. It’s getting tighter and tighter. Some might have some more wiggle room but for how long?
I fully agree. I was listening to Ed Yardeni on CNBC yesterday, and he is of the opinion that the economy will continue to grow next year based on the premise that households' have accumulated assets since the start of the pandemic, and household net worth sit at all all time high. While the numbers are correct, it is the baby boomers and generally households with higher income whose net worth have increased over the last few years and who may continue spending into next year. But the middle and low income class is properly squeezed and yes I am afraid a lot of the consumer retail will warn caution. Home depot reported earnings this morning and did the same with their next years' projection.
Idk it could happen but Id advise they set aside the pipe dream… Look 👀 short notes @5.25 grab them before the heavy snow arrives (has anyone seen these monster wooly worms😳) just saying kiddos you be careful out there. One half-baked tomato in the WH has landed us where we currently stand, knee-deep. Don't think it can't because that kind of stinkin thinking leads to very unpleasant circumstances and besides, it could be piling up huge snowflakes, at a time when energy reserves are at their lowest.
Always hard to predict market movement, even more by a specific date. But if we are really in a bull market, we should test all-time highs at 4,800 in coming months. That would be my target, but 4,600 will be a key resistance on the way!
100%. I think timeframes are very difficult to predict with any form of accuracy. You are right, if we are really in a bull market, we ultimately need to cross the 4600 mark and then create new all time highs over 4800.
Amazing insight! Thank you
Glad you enjoyed it.
I feel like this is 2007/2008 all over again. In 2007 stocks peaked in the fall then dropped in 2008. Today, fiscal stimulus is still working its way through the economy but will end in 2024. QT has not slowed the economy much but its effect will be felt when the fiscal stimulus starts to runs out. I think stocks will peak in the 1st or second quarter of 2024. The question will be, can economy stay propped up until after the election. I believe that both commercial and residential real estate declines will be the cause the economy to tip over. I've been following Melody Wright's substack and what she is finding in real estate is really troubling. Hang on, it should be a wild ride.
Melody Wright is super insightful when it comes to her outlook on the real estate market. And you have brought about some very interesting points. What QT has done is contract bank lending, which is what it was intended to do, though the rapid rise of interest rates (along with it) also mean that banks sit on record level of unrealized losses, which for now, the Fed has a facility for (BFTP) to restore investor confidence and prevent bank runs. Imo, the main driver of inflation in this cycle was fiscal spending, and not bank lending (like in the 1970s) and the Fed unfortunately does not have the necessary tools to quell a fiscal driven inflation, as the one we are facing now. At this point, fiscal spending will continue to add "real economy money" and this may actually keep recession off the bay for as long as possible, because on the consumer side, there are weaknesses arising. Plus, it is rare to have a recession during an election year, so it will be interesting to watch that dynamic.
Like always, amazing insight Amrita😍👍 I also really liked that you mentioned Ron Baron, who is, for me, one of the best investors but somehow gets unnoticed in mainstream media.
I try to follow him whenever he gives an interview and continuously read his investor letters, fund updates, and am amazed by his performance, thought process and the long holding period of each of his investments.
Most recent Letter from
Ron (3Q23) 👇
https://www.baronfunds.com/investment-insights
Thank you Oktay for pointing me to his latest investor letter and glad you enjoyed the post. You are right, that he is not highlighted by mainstream media, probably because he is not the typical loud personality that a CNBC or other media outlets love. Actually Bloomberg recently covered his fund and that is when I looked into it properly and realized that his investment style and principles are very much aligned to mine, though, of course, I haven't spent nearly as long as he has in investing and neither am I a billionaire.
I think the market is getting very complacent again. I have three things I want and plan to use; time, dry powder, and popcorn.
I woke up this morning and literally every single news outlet have headlines that soft landing is back. It was not more than a week or two ago, that everyone was talking about bond market meltdown and how that increases the probability of a hard landing. Markets are shifting their narratives so frequently. And yes, you are right about the complacency. Right now, it took some weak economic data as a green light to start roaring again. To me, the underlying fundamentals don't look promising at all. But I am also keeping an open mind, given the sheer amount of fiscal spending that is keeping the economy from falling hard into a recession and the fact that next year is an election year for the US.
I can’t fault any of that rationale whatsoever!
I guess we will hear more lower earning, since a lot of short term fires are out and a lot savings programs are already leveraged. Now it’s gets more messy to safe costs inside companies. It’s getting tighter and tighter. Some might have some more wiggle room but for how long?
I fully agree. I was listening to Ed Yardeni on CNBC yesterday, and he is of the opinion that the economy will continue to grow next year based on the premise that households' have accumulated assets since the start of the pandemic, and household net worth sit at all all time high. While the numbers are correct, it is the baby boomers and generally households with higher income whose net worth have increased over the last few years and who may continue spending into next year. But the middle and low income class is properly squeezed and yes I am afraid a lot of the consumer retail will warn caution. Home depot reported earnings this morning and did the same with their next years' projection.
Idk it could happen but Id advise they set aside the pipe dream… Look 👀 short notes @5.25 grab them before the heavy snow arrives (has anyone seen these monster wooly worms😳) just saying kiddos you be careful out there. One half-baked tomato in the WH has landed us where we currently stand, knee-deep. Don't think it can't because that kind of stinkin thinking leads to very unpleasant circumstances and besides, it could be piling up huge snowflakes, at a time when energy reserves are at their lowest.