Transcript:
Tom Vaughan:
Hello everybody, welcome to Tuesday. The S&P 500 was up .37% today, closing at an all-time high again. The Dow closed above 36,000 for the first time, going back to the 1800s. Really incredible market that’s happening here, and most of this has been driven by earnings. The expectations were that we’d have about 30% growth in earnings, which is actually fantastic, but those expectations were brought down because of the supply chain issues and inflation and the labor issues that have been happening. So at one point, it was about 28% expected. Well right now, as we start to wrap up the third quarter earnings reports, looks like we’re going to hit about 36.6% growth in earnings for the third quarter. And this would be the fourth highest quarterly growth in earnings since 2010.
So, really powerful. Everybody was expecting things to go south, and they actually went even better to the upside. And I’ve been saying this before, there’s lots of people still think the market’s going to go down even right now. And unfortunately, if you believe that, you’re also essentially saying that these companies, these American companies can’t do it. They can’t adjust to this situation, and that they’re going to have all kinds of issues with that.
And so betting against corporate America here has not been a very good deal so far, for those they’re doing it. For us that are fully invested, that’s worked out really well. So it’s been pretty exciting. So earnings have been a big catalyst. And then, you know, as we get closer and closer for these bills to get through Congress, there’s some very important pieces in there in terms of taxation.
So, there was an expectation that taxation on corporations would go up quite a bit. And again, politically, there’s all kinds of things we may or may not want to do, but in terms of what the stock market’s going to look at, when we have a 1% stock buyback, you know, tax new tax, and a 15% minimum tax on corporations over a billion dollars, that’s better than what was expected. So the market is going to respond to that also and start to come up.
And so really fascinating timeframe, and the market just keeps going. We’ve got room to grow, in my opinion. The Small Cap stocks that ran so much yesterday, really haven’t done a lot for a while. Sometimes when these markets get going, eventually it moves over into the Small Cap area and it really can take off too so we’ll see how that plays out. But good thing so far. Lots of good news for those of us that are invested. So look forward to talking to you about this tomorrow. Thank you.