Roughly 98% of S&P 500 companies have reported and of that total, 64% have reported positive revenue surprises and 78% have reported positive EPS surprises. I am starting to wrap my mind around the S&P 500 finishing the year at 6,500, perhaps even 6,600, advises Keith Fitz-Gerald, editor of 5 With Fitz.
Once again: A) The Street has gotten it wrong with the constant fear mongering and B) Companies are making serious headwinds on operational efficiency AND sales! While we’re at it and before I forget, the blended EPS growth rate is now 13.3%, the second consecutive quarter in a row of double-digit growth.
It’s not a surprise to me – and I trust not to you, either – that the markets are now within a few percent of February highs. There's still a lot of fuel in the tank.
So, why does the rally feel so “fragile” to so many? Because there's still tariff uncertainty.
Here’s the thing, though. Investors who know how to play the game and who understand the bigger picture also know that Artificial Intelligence (AI) and big data – among a few other themes we talk about regularly - are going to drive our world for decades. That’s why I have no problem investing into any weakness if it surfaces.
AI is still accelerating. Revenue and earnings, too. At the same time, inflation is falling like a rock in many categories.
Investors who have sat this one out since April because they thought they were being smart very likely realize that they’ve made one heck of a mistake, and a very expensive one at that. FOMO could propel things higher faster and, history suggests, will.
Just sayin’.
