Traditional Sources of Pent-Up Demand
GDP estimates for 2021 keep climbing with the majority of economists expect a Roaring Twenties type of Boom kicking into gear in the second half of this year. Economists expect the successful vaccination of the majority of Americans to be completed by mid year which will unleash a torrent of pent-up demand. This concept is easy to grasp after a year of being careful, postponing vacations, not being able to enjoy frequent visits with family and friends around the dinner table, or catching a good movie and eating buttered popcorn, and spontaneously dining in at a favorite restaurant.
Higher Rates Compress Growth Stocks The market s valuation is stretched but has been justified based on historically low interest rates which have been deemed low enough to support a P/E ratio of 20 for 2022 earnings. That is changing as Treasury rates have pushed higher and are now approaching the highs recorded in March 2020.
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If Treasury rates breakout above those highs the market could be vulnerable to a quick valuation check. As noted in recent weeks, Longer term the 30-year has the potential to rise to 2.15% to 2.35%.
A Fundamental Bull Market or Speculative Binge
A fundamental bull market is supported by broad based economic growth which spurs solid growth in worker s wages and organic growth in corporate revenue and cash flow. The steady increase in economic activity lifts the stock market but the market s valuation is below the 75th percentile of historical valuations. A fundamentally driven bull market is not dependent on the economy needing an extraordinary amount of fiscal stimulus to avoid a recession and surge in bankruptcies
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Timeless Tale From The South Seas
Manic Reddit Chat Traders and Sir Isaac Newton
Clearly, Isaac Newton who became Sir Isaac Newton after being knighted by Queen Anne of England in 1705, was not only one of the brightest minds of his time but all time. But Isaac Newton was also human.
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The car trip we planned will take us somewhere we’ve never been so before we leave we enter the address into our phone to get directions. As we drive we are told when to turn right or left and as we approach the destination we are told that it is 500 feet on our right. The precision is unbelievable but it has become a normal facet of daily life.