Transcript:
Tom Vaughan:
Everybody welcome to Monday, the S&P 500 was down point zero 4%. Today, almost made it all the way back, it was up in the green. Chairman Powell with the Federal Reserve was speaking talking about that they might have to get more aggressive if inflation continues to be a problem, maybe even do half point rate increases, the market drops on that he does talk about how he felt the economy could handle these rate increases, market started back up there. But I think really, when you look at the Federal Reserve, especially from last week, people are looking for the Federal Reserve to be able to try to get in front of this inflationary situation. And I feel like a lot of people were feeling like they’re behind. And now maybe they’re appreciating more this concepts that they’re talking about and getting more aggressive against inflation. Whether the Federal Reserve can stop inflation or not is a whole nother ballgame. But I do think the market is okay with these comments, you can see that we basically came all the way back today, which wasn’t true earlier this year when some of these comments were made.
So what’s going on right now is with inflation has to do with earnings. If you keep running inflation at higher rates, eventually you’re going to impinge earnings. And earnings are what really drive the stock market. And so, you know, we had some earnings come out today from Nike is sort of a bellwether company that people watch, just because it’s the beginning of earnings seasons, you know, so what’s going to happen with their supply chain? How did consumers do with the consumer portion of their products? They did fantastic. Actually, the numbers were really good, they beat expectations. So that’ll be interesting. See how that plays out tomorrow.
One other thing I found interesting today, there was a survey put out today by the American Association of individual investors, looking at individual investors, thoughts about the market did they feel like the market was going to go up or it’s going to go down? Only 23.9% of the people in the survey over the last 10 weeks, felt the market was going to go up. And this was a historic low for the survey that goes back to 1987. And so here’s the interesting thing about this part of the educational component of investing in the stock market, when a when a vast majority of that people get on the negative side. Basically, they’ve already made their adjustments they’ve already done their selling the things that they want to do for the most part, and it leaves the people that are more positive about the market to kind of run the market up, which is I think what we saw last week, historically, when that survey gets down to that low number, the next six to 12 months has been a positive return for the stock market. So you know, these are a lot of things lining up. Great week last week, those four days are fantastic. Just to hold up at all today after that much gain, I think is a really good sign. So let’s see what happens here going forward. But look forward and see what’s going to happen tomorrow. Thank you very much.