The Trump administration backed off last week’s bombardment threats, for lack of a better term, saying: “We’re going to sign the armistice papers this weekend.”
If the truce holds, then the market decline we experienced over the past two weeks qualifies as a correction..
If the fight really ends, that would be the best case scenario.as the 2,500+ point drop on the NASDAQ 100 (June 3-11) is pretty close to a correction, given further increases in oil or Treasury yields.
Two major threats to the US power structure – Those who are able to disproportionately drive the market – are The Federal Reserve and the Presidentmonetary and fiscal policy leaders. Their actions can cause large swings both up and down even in a good economy. The Trump administration raised tariffs last year, and to a lesser extent this year with the Iran war. The Federal Reserve may also affect markets, as in late 2018, through more tightening, and with delayed tightening in 2022.
It looks like the next big swing in the stock market will come from the Federal Reserve and its new Fed chairman.who has very different ideas (out of Fed Chair Jerome Powell) about how to manage the Fed’s balance sheet and monetary policy.
Meanwhile, I guess this market rally continues.and we’ll likely make fresh highs in the S&P 500 and NASDAQ 100 this summer, though If there is no active war in Iran on the market, the indices should widen.which means the vertical movement in the tech sector will be less vertical and tend to normalize as money continues to flow into other sectors of the market.
The S&P 500’s first-quarter earnings per share (1Q EPS) growth was about 29%. Q2 estimates call for growth of more than 21 percent. Because estimates are generally underestimated in a good economy, they may increase by 25% or more. With that kind of earnings growth, it’s hard to put the stock market down.though the benefits of EPS are lopsided towards the technology sector, as that’s where AI data centers are being heavily spent.
Space exploration technologiesSPX) launch was a success, rising 19% (from the IPO price) on the first day of trading. I’ll be tracking it to see if it breaks the $135 IPO price, which is impossible to predict ahead of time, as I expect Elon Musk to have a lot of tricks up his sleeve as Starship launches and launches a lot of satellites into space, which could be welcomed with share price appreciation.
I don’t expect SPCX to make sense for years.At least when measured by income and revenue multiplier, because it will trade on the hopes and dreams of cities on the moon and Mars. This means that the shares can swing wildly when the lock-up expires. The odds of it breaking the $135 IPO price are not insignificant, although they are impossible to quantify, despite an “Elon Musk halo effect” we’re seeing these days.
My guess is that SPCX has a good chance of breaking the IPO price of $135 the next time we see a stock market rumble in the next few months, as we just experienced, as No more lock-ups expired. We need more stock available to trade for that to happen, which is not the case right now.