it is beyond tariffs now. ai bubble drove up the valuation and is deflating now slowly. msft cancelled data centers, deepseek can run on non nvda chips with equa performance. in addition debt service cost is more than defense spending, the 1.8t budget deficit is 6% of gdp. simple math walking back 40% leaner gains from 22 bear market and extrapolate up to date would put spx somewhere around 4200-4400.
4185 was my worst case scenario for 2024. Obviously it didn't happen. I did beak out the magic pencil on the Q's the other day, I think I came up with a number right around $443. But I'll check later.
Or alot of that has been priced in and markets are always forward looking. (Full disclosure I'm expecting lower prices on indexes, just not the doomsday some are calling for.)
market also priced in tsla moonshot but look at where we are now. pe multiple would revert to the mean.
tsla is in the same league as arkk, in a sci-fi portfolio, future proof. no one wants gm and ford, nor toyota and mercedes.
Oh I agree. I would not be surprised to head even lower in the grand scheme. I meant for the somewhat near future, those seem like reasonable targets for me.
I agree, but I don't think anyone knows, including Powell, what effect these tariffs may or may not have. You can bet that this weekend the whales' models right now are probably calculating the worst case scenarios. Their AI machines are probably taxing the power capacity of the N.E. grid as we type. If it was summer, there'd be rolling blackouts. And make no mistake, they'll figure it out. They'll also front run the bottom with a huge sell when it gets that far. They'll induce MAX pain, and load their coffers on the cheap. And when the bottom hits, it will only last a few hours at best, if that long . But with that said, we must also bear in mind that some of the fastest and largest upspikes are always had in bear market declines so it makes it tough to discern what is real and what is a trap. B1 nailed the Covid bottom back in March/April of 2021 (Search the "Izzy Bottom"). I thought it was a bear rally and I was wrong. The markets didn't look back. So when B1 chimes in this time, not saying he's going to go two for two on these major calls, but it should certainly get our attention. If he chimes in. All that... or Trump could just say "Well, I changed my mind... no tariffs" come Wednesday. Then btfd and await a post from the V-Man. (not me, the other V-Man)
Before long, Trumps rhetoric will reverse markets - as will a return of the Fed put. Matters not to me. I'm a chart guy .
Except with one caveat: RECESSION + INFLATION Of course, the Fed could easily slash rates, but will they? The last time I checked, prices at Costco went up across the board. So they might find themselves in a real bind this time.