Bear Market Rally or New Bull? |The Fed Talks Tough but Does Nothing | PE Like its 1995
By Derek Moore
Show Summary:
Jay Pestrichelli is back with Derek Moore to discuss Jay Powell’s tough talking but no action Fed. Plus, is this a repeat of the 1994-1995 forward PE expansion bull market? Also, they go back to the 200-2002 bear market where the Nasdaq 100 had 7 different 20% bear market rallies and the S&P 500 had its own share. Is this different? Finally, Jay and Derek look at instances where the S&P 500 made new highs with only 5% of the companies also making 52-week highs and the subsequent future historical returns. Off course some recommendations and they read a listener note.
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Topics Include:
- Why is 20% of the low a new bull market suddenly?
- New bull market or another bear market rally?
- The 1994-95 blueprint of markets rallying with forward PE expansion with rate hikes.
- Jay Powell and the Fed claim they are doing 2 more rate hikes?
- Tough talk by the Fed but they sit on their hands at the meeting.
- Why the Fed had nothing to do with taming inflation.
- PE multiple expansion responsible for the market rally.
- Fed may keep rates higher for longer.
- Does the Fed and inflation even matter anymore?
- Reviewing the 2000-2002 many failed greater than 20% bear market rallies
- Quantity theory of money PQ = MV
- The velocity of money and why quantitative easing doesn’t always cause inflation
- Inflation dropping (caused by supply chain problems and government stimulus) not the Fed
Mentioned in this Episode:
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart