Equities traded quietly higher in Thursday's NY session. Simultaneously, bonds were bid rather firmly, sending interest rates even lower. What is going on beneath the surface?
Greetings. I hope this article finds you and yours well. Today, we are taking a look at some additional market indicators and internals to get an unbiased perspective on things.
First, I want to preface things by mentioning that I am not suggesting that I am fully bearish on the S&P 500 or stocks right now. However, I am taking more of a cautious stance at the moment.
Figure 1 - S&P 500 Index April 15, 2021 - July 21, 2021, Daily Candles Source stockcharts.com
Nothing new to see here. Just another pedestrian pullback to the 50-day SMA and a bounce back. This pattern has repeated itself several times since the pandemic lows in the $SPX. It won't repeat itself forever - that would be too easy.
Since it is earnings season, let’s talk earnings multiples.
Feeling bullish? It can be challenging to get excited about an $SPX at 4400 with an estimated 46.40 P/E ratio (trailing twelve months). We are in the middle of earnings season, so we will have a clearer figure soon.