We enter March with 14 new record closes for the S&P 500 and the NASDAQ Composite joined the club yesterday. 

Looking at the last thirty years, it’s not unreasonable to think this could see dozens more days of record closes.

            

But there are those that feel the market is stretched and that investors are giddy.

The cover of the new issue of The Economist says, “A golden age for stock markets is drawing to a close.”

My initial take upon seeing the cover last night was- it's probably a good contrarian indicator.  But a similar cover back in February 2000 proved to be somewhat prescient. In fact, it provides fodder for long term investors and short-term traders.

The market took a turn for the worst and lurched into a horrific freefall that took years for many stocks to bounce back to, even while some still haven’t, and others have vanished.

For investors, this line stands out:

The increase in the firms’ combined value, of almost $2trn, is hard to get your head round: it is roughly equivalent to Germany’s entire stock market. Four of the five—Alphabet, Amazon, Apple, and Microsoft—are each now worth over $1trn. (Facebook is worth a mere $620bn.)

Those five horsemen have a combined market cap of $10.6 trillion.  Note: Apple (AAPL) has been taking a bit of a hit this year, down over 5% YTD (Goldman removed it from its conviction buy list).

The average holding period of a stocks back then was little more than a year and now it’s around five months.

Back when only wealthy folks owned stocks, the holding period per position was more than six years.  I think one of the reasons we are so much more skittish these days is knee-jerk reactions to the abundance of information.

In today’s session, nine of the 11 S&P 500 sectors are in the green with Energy and Technology leading. WTI topped $80 a barrel.

ISM

The final read on consumer sentiment missed big time.

The ISM PMI Report declined to 47.8 from 49.5, missing the street with big declines in new orders and employment, while prices are still expanding.

And constructions spending in January declined 0.2%, the street expected +0.3%.

Have a great weekend.

Comments

the streak of record highs is just the market adjusting to the reduced spending value of the dollar which happens whenever there is a flurry of money printing-- which is what team biden does best- then he will take credit for apparent stock market increases. I wish you would talk about that more Tom on 3/1/2024 7:30:07 PM

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