The market fell almost 20% in April but currently sits 34% above its 52-week high. Valuation metrics show an expensive market, yet strong earnings—especially from big tech—have offset those concerns. Some companies reported softer results, but not weak enough to materially alter forward projections; Walmart and General Motors noted inflation worries without major forward impact. Long-time laggards like IBM and Ford remain underperformers unlikely to drag the broader market. AI investment and heavy spending on server centers have driven much of the run-up. High tariffs could trigger abrupt inflation, but recent legal limits on presidential tariff authority reduce that immediate downside risk.
The market dropped almost 20% in April. It is now 34% above its 52-week high. There is no single reason to think it will stop rising, except that it is already rising. The market is expensive, based on S&P ratio yardsticks. However, strong earnings, particularly in the big tech sector, can offset this. Big tech rules the market value. Big tech earnings were super.
What is the conventional wisdom about a market reset? Most arguments revolve around inflation. It is not inflation that steals consumer spending based on traditional triggers. It is inflation that will occur all at once due to tariffs. Whether this will harm consumers remains to be seen. One advantage consumers have in a period of historically high tariffs is that businesses absorb them and do not pass the price increase on to customers. The fear is that burdening the customer's spending could cut back sales.
Collection
[
|
...
]