Returning to 2000/07 valuations requires a 40% drop in the US stock index; returning to above mean value 100% of GDP would require a 70% drop
TSP & Vanguard Smart Investor Posts
If interest rates today matched inflation the 10-year would already be 8% which in turn would collapse valuations back to 10x earnings… so the stock market would be 65% lower today relative to earnings.
We are already, she said, in the middle of a third World War, whether we’ve fully grasped it or not.
And if I were selling subscriptions or using an email list, this is where the cancellations come. Here it goes: I guess I’m a traditionalist. As Americans, during a crisis we would rally around the President. This is not the time – the era – to crave – to strive – for his failure. There’s no Honor in that. Most regrettably, we today have our own domestic “iron curtain” and “cold war” mentality. It will not serve us well.
The SP500 needs to hold 4300. There is little support below this level.
Consumer price inflation continued to run hot in January. CPI increased a stronger-than-expected 0.6% during the month, boosting y-o-y inflation to a 40-year high 7.5%. Hyperbole is unnecessary. Inflation is out of Control.
Sell and Hold
Market internals moved from bad to ugly this week. There was little bounce after Options Week ended. Then the Federal Reserve basically confirmed that they are not there to prop up the stock market for now.
Do not try to catch falling knives.
Either the market bounces here or it goes into correction.