What Happens Next After Back-To-Back 30% Surges in the S&P 500 Total Return Index?

Two years of stock market exuberance does not guarantee a third

Highlights

• Two years of stock market exuberance does not guarantee a third

• Breaking down our 2024 calls (no, we’re not perma-bears)

• Where to find juicy yields in the fixed-income space

• The latest Beige Book has disinflation written all over it

Key Takeaways

Mixed Performance in Global Equity Markets

• The global equity market is squishy soft in the overnight trade. U.S. futures are fractionally in the green. Europe is experiencing a rare down-day, off -0.4% thus far (in the process of snapping an eight-day winning streak). Asia once again turned in a mixed performance.

S&P 500 Triumphs, but Gold Shines Too

• The S&P 500 is up +27% for the year and all we face is grief for not being long the index — yet never a word from anyone that we absolutely nailed the gold call, and that bullion is actually doing slightly better this year. Not all our calls were a disaster in 2024 (tack on Japan +18% and Hong Kong +19%), just so that you are aware.

Extreme Bullish Sentiment

• Ever-rising bullish sentiment is getting even more extreme. The updated Citi Panic/Euphoria index rose to .62 from .58 the week before. It's now about 50% above the Euphoria threshold and above the previous July peak (Citi claims that above .41 is statistically significant)… an insane level of complacency.