Below are some of the most interesting articles, quotes and charts I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
Powering the stock market surge of late is extreme investor sentiment that can be seen almost anywhere you look.
"Bet on the Bull" –@barronsonline https://t.co/3XDOtfHN9F pic.twitter.com/AGcDdC5Kuc
— Jesse Felder (@jessefelder) March 9, 2024
Extreme valuations, throughout the market, clearly reflect the extreme in sentiment…
"The biggest stocks are more overvalued, but to call the market outside the top 10 cheap is being generous." https://t.co/hWm7IfA8Mz via @dailychartbook @NDR_Research pic.twitter.com/CbLRGjGKGd
— Jesse Felder (@jessefelder) March 15, 2024
…because they implicitly discount extreme earnings growth in the years ahead.
'Analysts are very optimistic about US tech sector earnings growth.' https://t.co/FzCbKXItnU via @SoberLook pic.twitter.com/FCMxJNFXdc
— Jesse Felder (@jessefelder) March 6, 2024
But record valuations built upon record profit margins represent a “double jeopardy” for investors.
'Remember, if margins and multiples are both at record levels, it really is double counting and double jeopardy – for waiting somewhere in the future is another July 1982 or March 2009 with simultaneous record low multiples and depressed margins.' https://t.co/xVZcmE2kK4
— Jesse Felder (@jessefelder) March 11, 2024
And any disappointment could result in a painful shift in stock market momentum.
The weight of high-momentum stocks in U.S. markets has never been this high over the past 100 years. #macro #hope $SPY pic.twitter.com/Si6Jcc5XlF
— Kantro (@MichaelKantro) March 13, 2024
