The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
The story is the story.
Overnight action was uninteresting and S&P 500 futures caught a bid with the opening of European trading. The futures indicated about 15 points of upside. The index opened up small and bobbed around for a couple hours. The bulls took over before midday and the rally gathered momentum in the afternoon. Capital flow was light at 92% and Treasury yields barely moved.
Why did we rally today? Because the market is going up. That’s the story and that’s the explanation. The headlines had little fundamental influence. The fact that the S&P climbed all five days this week was more significant as market chatter than anything else. The S&P is about 200 points away from the old highs and most equity investors are convinced that’s the next destination for stocks. How can one argue with them either?
There’s no fundamental danger lucking around the corner. Recession risk is melting away. Polymarket currently prices a US recession in 2025 at 36% but most economists on the street have chopped their recession risks significantly and markets are not pricing recession risks with any notable conviction.
The stock market is dipping its toe into euphoric sentimental waters. At some point, the sentiment will be too wildly optimistic but we are not there yet. We have to overswing to an absurd degree.
So get ready for some boom-time bullish hyper-happiness. This party is roaring. I worry about the end but until it does end, it’s going to be an orgy of upside.
See you Monday, have a great weekend.
-Mike
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