Why the Stock Market Can Get Even Crazier from Here

TLDRThe stock market has been on a historic run, but earnings have been flat. The enthusiasm is based on expectations of Fed rate cuts. If the Fed implements a soft landing, the market could rally even further. Investing in small caps may offer better opportunities.

Key insights

📈The stock market has had a historic run, with only three negative weeks in the last 21 weeks.

📉S&P 500 earnings have been flat for this year.

🔮The market is expecting Fed rate cuts, leading to the current rally.

💼Investing in small caps may offer better opportunities for growth.

📊The S&P 500 is acting as if the Fed will institute a ton of cuts, despite the Fed signaling only three rate cuts for 2024.

Q&A

Why is the market rallying if earnings are flat?

The market is focusing on the expectation of Fed rate cuts, which can drive up stock prices.

What is a soft landing?

A soft landing refers to a gradual slowdown in economic growth without a recession.

Should I invest in small caps?

Investing in small caps may offer better opportunities for growth, especially if the market continues to rally.

What category does this video belong to?

This video belongs to the Education category.

Will the Fed actually cut rates?

The likelihood of rate cuts depends on various factors and economic indicators. It is uncertain whether or not the Fed will cut rates as expected.

Timestamped Summary

00:00The stock market has had a historic run, with only three negative weeks in the last 21 weeks.

01:59S&P 500 earnings have been flat for this year.

04:06The market is expecting Fed rate cuts, leading to the current rally.

06:15Investing in small caps may offer better opportunities for growth.

08:26The S&P 500 is acting as if the Fed will institute a ton of cuts, despite the Fed signaling only three rate cuts for 2024.