Put & Call Implied Volatility Mismatch? | US Dollar vs S&P 500 Correlation | Sticky Inflation | Japan Recession | Explaining Why Stocks Go Up (or down)
Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial, follow up on last week’s PE ratio (useless?) discussion explaining how stocks go up or down based on earnings, multiples, and other factors. Then they delve into correlations between the US Dollar Index and the S&P 500 Index. Later, the surprising fact that as Japan’s Nikkei Index makes 35-year all-time highs they are in a technical recession. Finally, more evidence shows that inflation may be stickier and some that it may not. As always, they’ll have some recommendations!
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Topics Include:
- Explaining how EPS earnings per share works
- How the PE can change due to earnings going up or the multiple going up
- How a stocks movement from one year to the next can be attributed to earnings and multiples
- How the correlation between the US Dollar Index and the S&P 500 Index has flipped of late
- Why a lower dollar helps large multinational companies earnings
- Congratulations, Japan is making all-time highs while in a technical recession
- What is a technical recession that everyone is now calling 2 quarters of negative GDP growth
- Car insurance premiums rose another 20% year over year…inflationary?
- How lagging price changes may continue to be sticky for inflation
- Looking at how OER Owners Equivalent Rent has been trending lower
- How higher rates may have put pricing pressure on rents
- How market returns and earnings growth aren’t the same every year
Mentioned in this Episode:
Historical Returns on Stocks, Bonds and Bills: 1928-2023 NYU Aswath Damodaran
Jay Pestrichelli’s book Buy and Hedge
Derek’s new book on public speaking Effortless Public Speaking
Derek Moore’s book Broken Pie Chart
Contact Derek: derek.moore@zegafinancial.com
Did you miss last week’s episode where Jay and Derek covered:
Is the Forward PE Useless?| S&P 500 Election Seasonality | Gen Z vs. Gen X Special
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