Transcript
Hello, everybody, welcome to Wednesday, S&P 500 was up a little over 1%. Today, great day, we are getting the run that I hoped we would get when we broke into a new all time high. We said another all time high today. And more importantly for us, a lot of our targeted indexes did incredibly well today, including our software targeted index, which was over up over 5% today alone. And that’s in most of our portfolio. So really happy with that. I’ve been getting a lot of questions from people asking, why is the stock market doing so well, when there are so many problems going on in the economy and with unemployment?
Okay, so first of all, the government put out $10 trillion, so far, trying to support the economy, and that has created an environment that has a stability to turn the market around. And that was really the catalyst at the beginning, we’ll have to see what happens with that going forward. Service industries are getting hit the hardest by this restaurants and those types of things. They’re not really even on the stock market. And if they are, they’re kind of small, big companies have a bigger impact on the index, S&P 500 has 500 stocks, but it’s weighted on the capitalization.
So Microsoft and Apple have much more impact than a smaller company. And so that’s where the other parts come from, these companies are making more money. So these big companies, big tech companies, because of the virus are actually having revenue flowing their way. They’re setting records in terms of cash flow and sales. And so and they make up the biggest portion of the movement of say the S&P 500 is coming from those. And then lastly, the market looks forward. Okay. And so unemployment is terrible now. But the analysts say it’s going to be better a year and two from now.
And the market is looking a year or two from now, earnings are terrible, while the analysts said they’re going to be better a year or two from now. And the market is looking at that and moving with that. And so the market is a leading indicator, it is right now trying to tell us that things are going to be better in the next year or two. Now we’ll have to wait and see what happens. But that’s what’s happening so far. And that’s kind of my best explanation I can come up with for why there’s such a big disconnect as far as that goes. So look forward to seeing what’s going to happen tomorrow. And we’ll talk to you then and we’ll see what happens. Thank you.