The Week On Wall Street: Skeptics Get Stomped By New Highs For The S&P And DJIA


No risk no Reward

Yavor Naydenov/iStock via Getty Images

«Men who can sit tight and be right are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this can he make big money.» — Jesse Livermore

The stock market recently celebrated two anniversaries that many want to forget. Thirty-four years ago today, the S&P 500 experienced what was at the time (and remains now) the largest ever single-day percentage decline losing just over a fifth of its value. The crash of 1987 has a lot of lessons for investors, but one important one is that time is on your side when it comes to investing. If you were a dip buyer and stepped in right at the close on 10/19/87 and held through now, your annualized return, not including dividends, would have been an impressive 9.2%.

Fourteen years ago marked the start of the Financial Crisis bear market for the S&P 500 that ran from October 10, 2007, through March 9, 2009. Over that period, the S&P 500 would go on to fall 57%. That drop and bear market is what remains with many market participants.

The bear market is going to come any day now or so we have been told. Last week I revisited all of the forecasts calling for a 20% correction. Those calls are now 3 months old. The stock market as measured by the S&P 500 is higher than it was when those predictions were announced. So we now realize that wasn’t the time to take extraordinary defensive action, hedge, and go net short the equity market.

The ability to recognize a trend change, prepare, and then profit, is scarce these days. Yet once learned it removes some of the fears about market tops and corrections. That trait also allows an investor to stay with the dominant trend in place rather than simply guessing when to lighten up on their equity exposure. Furthermore, it implies that an investor doesn’t have to predict anything, unlike the individual calling market tops. I’m constantly amazed how analysts with years of experience continue to fall into the same trap. Then again, I shouldn’t be, it’s all about human nature.

Wall of Worry

I’ll be the first to admit the wall of worry these days is HUGE, and I’ve highlighted the issues week after week. Yet, I haven’t changed my equity strategy one bit. Rather than deal with the wild swings in emotion, a market participant has to learn that it is possible to identify and react to meaningful turning points. The difference, there are no predictions required, identifying isn’t predicting.

Once an investor realizes that, they will start to build confidence. It eliminates those thoughts that cross every investor’s mind. Every investor has pondered these concerns:

«I better start to raise cash, the market has risen too far, there are warning signs, all signs point to a correction…»

… and on and on.

Folks, there are warning signs every day, and one can conjure up any series of data points and events to mold a story as to why it is time to start liquidating equity exposure. The skeptics that just laid out their pessimistic views of the market have done that again. Some have done it for years, despite being proven wrong time after time.

Therefore, identifying a changing trend is the only way to proceed to maximize gains. As Jesse Livermore tells us, that means taking little to no substantive action when the primary trend is still in force. To reap the lion’s share of the gains that are being presented, it is imperative to follow the technical backdrop that is in place.

Skeptics Never Go Away

Many remain skeptical of that strategy, the noisy world around investors always takes its toll, and it can affect the most seasoned investor. Instead of following a stated course, emotion takes over. I listened to an interview with Carl Icahn this week and I came away with an interesting observation. When asked about some of his short-term positionings during last year and into 2021, his commentary was very revealing. He mentioned that he got away from his strategy. A strategy that avoided trying to forecast the short term, and in his words, he «paid the price».

The takeaway; no matter how long an investor has been in the markets, we are all vulnerable to getting caught up in the moment. The human frailties (emotion) that we all possess will indeed cause any one of us to stray from what should ALWAYS come first — the intermediate to longer-term view.

Investors like to discuss the daily and weekly moves in individual stocks and sectors. That is part of the markets that intrigues anyone that manages money. However, that is also the part of the investment scene that can trip up market participants. Therefore, I always lean to my default mindset. During times of questionable market activity, it is best to reassess the situation by going back to the longer-term trend.

Investors have to understand that being comfortable and managing money successfully rarely go together. If one seeks comfort, they should visit My Pillow and turn the managing of their money to someone else.

The Week On Wall Street

Major indices entered the trading week coming off the best performance since June, leaving the S&P 500 1.45% from the all-time high. Crude oil starts the week at the highest level in 7 years. 72 S&P 500 companies are set to report earnings this week.

Early selling pressure (concern over slower China GDP) gave way to dip-buying (optimism over earnings), and from there the back and forth trading action began. What took place was an early dip right to last Friday’s low. That was followed by a bounce off of support and the S&P 500 moved higher, making it four straight days of gains. Stocks closed at the highest level since September 9th on Monday thanks to strong performances by mega-cap tech. All indices except the DJIA closed in positive territory.

There was no turnaround on Tuesday, quite the opposite, as the S&P 500 gapped higher at the open and never looked back. With a close at 4,514, the index rose to within half a percent of the old high, making it five straight days of gains.

It was six in a row on Wednesday when the index gained 0.37% to close within a fraction of the old closing high at 4536. Investors didn’t have to wait very long when the seventh straight day of gains for the S&P produced a new all-time high, number 55 in 2021 on Thursday.

A pause for the S&P to end the week, while it was the DJIA’s turn to post a new record close. It’s back to the drawing board for the correction cowboys and cowgirls. The BULL just threw and stomped them in this latest rodeo.

The Political Scene

While the debt ceiling is off the table as a threat to market stability for the next five weeks or so, there’s still plenty going on in DC. The current horse-trading in Congress is taking place between four groups, with two bills hanging in the balance: progressives (mostly in the House), Democratic leadership (in both the House and Senate), the Biden administration, and the two Senators in the Senate (Manchin-WV and Sinema-AZ).

Both Sinema and Manchin appear to share a goal of bargaining down the overall size of the Democrats’ reconciliation package of tax and spending policies. Manchin made headlines arguing against renewable electricity incentives and arguing for a means-tested Child Tax Credit, in addition to his public desire to bargain down the overall size of the bill, while Sinema’s goals are entirely opaque. These two offer different approaches, with a heavy stream of headlines emanating from Manchin’s office but a general willingness to negotiate, while Sinema keeps a tight lip, we do know she is not happy with the proposed tax increases.

While both are roadblocks to the passage of any reconciliation package, it’s important to understand that House progressives, led by Congresswoman Pramila Jayapal of Washington, have their roadblocks already set up. They are very willing and able to vote down the bipartisan infrastructure bill which has been a major priority for both Sinema and Manchin. There is animosity present but there is also room for negotiation, and those negotiations continue; while we can expect the reconciliation bill’s total spending number to come in under $3 trillion in total (~1.3% of current year GDP per year for a decade), there’s ample space for negotiation.

The only «out» would be convincing both House leadership and the President (who have so far come down against Manchin and Sinema) to support passing the infrastructure bill in the House with Republican votes. No need to go into detail on what will be cut, and what tax might be added to satisfy all now. More than likely it will change multiple times and at the end of the day, not many will know the details of what they are agreeing to.

The D.C. drama continues, and so far the stock market isn’t reacting to the headlines. That suggests it expects a market-friendly result.

Congress is scrambling to find an argument, any argument, that sells their $5 trillion spending plan to a skeptical public. President Biden claims that all of his new entitlements will, well, make America greater. Mr. Biden:

«To oppose these investments is to be complicit in America’s decline. Pay your fair share, pay your fair share.»

That’s the battle cry for raising taxes. However, it seems most are doing just that, especially Corporate America. The Congressional Budget Office now estimates that the federal government received $370 billion in corporate tax revenue over the past year (the fiscal year 2021), matching the record high level from 2007. This is a 75 percent increase over the previous year’s total, reflecting a rebound in corporate profits and the broader economy. Likewise, as a share of GDP, corporate tax collections are higher this year (1.63 %) than in 2017 (1.52%).

Please allow me to remind everyone that the corporate tax rate is 21%. It’s not hard to figure out. More revenue due to a strong corporate America equals more tax revenue.

Total Tax receipts are also at records.

You have to admire the audacity of pitching higher taxes and more social welfare as the path to national revival, especially when the global evidence is the opposite. The economic data suggest we have been, and continue to be in a revival that will continue if left undisturbed.

This isn’t about politics, it’s about reality. Simple facts, no spin, no opinion, no conjecture, it’s black and white, and it’s right in front of everyone.

The Economy

The U.S. leading indicator rose 0.2% to 117.5 in September. The small increase was enough for another record high in the index, the second month over the 117 level, and is a 6th straight new all-time peak. The index has not posted a decline on the month since April 2020. The components were mixed with six making positive contributions, led by ISM new orders (0.23%) and the yield curve (0.14%), while four gauges declined, led by building permits (-0.23%).


Industrial production sharply undershot estimates with a 1.3% September drop after downward revisions. Hurricane Ida was cited as entirely accounting for a 2.3% mining drop after big downward revisions, and the hurricane likely depressed other sectors as well, given big downside surprises for every component. This week’s industrial production drop leaves the index below its pre-pandemic reading, after tying the February 2020 figure in August.

The IHS Markit Flash U.S. Composite PMI Output Index posted 57.3 in October, rising from 55.0 in September to signal the fastest uplift in activity for three months and one that was sharp overall. Stronger growth was driven by the services sector, which registered the quickest rate of expansion since July. Meanwhile, the latest rise in factory production was the softest since July 2020 and only mild, as goods producers continued to be severely hampered by material shortages and supply chain delays.

The Philadelphia Fed Manufacturing Index fell 7 points to 23.8 this month. More than 40 percent of the firms reported increases in general activity this month (up from 34 percent last month), while 17 percent reported decreases (up from 3 percent). The current shipments index was essentially unchanged at 30.0 in October. The index for new orders rose 15 points to a reading of 30.8. Over 47 percent of the firms reported increases in new orders this month, while 16 percent reported decreases.


NAHB housing market index climbed 4 ticks to 80 in October, much stronger than anticipated after edging up 1 point to 76 in September. This returns the index over the 80 handle, where it was from September of last year through July 2021. The 90 from November 2020 is the record high. Much of the strength was in the current single-family sales index which rose 5 points to 87 from 82. The future sales index was up 3 points to 84 from September’s 81. The index of prospective buyer traffic increased 4 points to 65 from 61 previously.

Housing starts declined 1.6% to 1.55 million in September, below expectations, after bouncing 1.2% to a 1.580 million pace in August from the 5.7% July slide to 1.56 million. Starts were at a 15-year high of 1.72 M in March. Permits also dropped, plunging 7.7% to 1.58 M in September after the 5.6% gain in August to 1.72 M.

Existing home sales beat estimates with a 7% September gain to a 6.29 million pace that marked an 8-month high, after an unrevised 5.8 million August clip. Analysts saw a -0.8% inventory drop-back to 1.27 million as analysts further unwind the 9-month high of 1.31 million in July, while the months’ supply fell to 2.4 from 2.6. Analysts saw a 1.4% drop in the median price that left a seasonal three-month pull-back from four months of all-time highs through June. The supply of homes for sale remains remarkably tight, though inventories have risen from record-lows in 2020, while prices remain remarkably elevated.

Job Market

Amazon (AMZN) announced 150,000 seasonal jobs are now available across the U.S. All Amazon jobs in the U.S., including seasonal roles, have an average starting pay of $18 per hour, sign-on bonuses up to $3,000, and an additional $3 per hour depending on shifts in many locations.

While that is good news on the jobs front it’s even better news for two of my favorites. Amazon and United Parcel Service (UPS) should continue to see a positive ramp in EPS.

The Global Report


One of the issues in the Wall of Worry remains stubbornly in place.

China’s economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages and wobbles in the property sector, highlighting the challenge facing policymakers as they seek to prop up a faltering recovery while reining in the real estate sector.

Gross domestic product expanded 4.9% from a year ago, missing forecasts, as attempts by Beijing to curb lending to the property sector exacerbated the fallout from electricity shortages which sent factory output back to levels last seen in early 2020, when heavy COVID-19 curbs were in place.

The world’s second-largest economy had staged an impressive rebound from last year’s pandemic slump but the recovery has lost steam from the blistering 18.3% growth clocked in the first quarter.

Under President Xi Jinping, a drive to make structural changes that address long-term risks and distortions, which has involved crackdowns on the property sector and technology giants, as well as carbon emission cuts, has taken a toll.

Regardless of what a market participant wants to believe regarding China, their GDP affects earnings in many U.S. corporations.


Eurozone business activity growth slowed sharply to a six-month low in October amid increasing supply bottlenecks and ongoing COVID-19 concerns, dropping most markedly in manufacturing though also cooling in services. Survey-record price increases were meanwhile reported as firms sought to pass an unprecedented rise in costs on to customers.

The headline IHS Markit Eurozone Composite PMI fell for a third successive month in October, according to the ‘flash’ reading, dropping from 56.2 in September to 54.3. The decline indicates a further cooling of the rate of expansion from July’s 15-year high. However, although the October expansion was the weakest since April, the latest reading remains above the survey’s pre-pandemic long-run average of 53.0 to signal above-trend growth.

United Kingdom

October PMI data highlighted a robust and accelerated increase in UK private sector business activity, with growth the strongest for three months. Survey respondents widely reported buoyant business and consumer spending due to the rollback of pandemic restrictions. Service providers led the recovery, but manufacturers signaled another slowdown in production growth due to severe shortages of staff and materials.

At 56.8 in October, up from 54.9 in September, the headline seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index was the highest since July and remained well above the neutral 50.0 mark.


The headline au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) rose from 51.5 in September to 53.0 in October, signaling the strongest improvement in operating conditions since July. Both output and new order volumes reversed the declines recorded in September to rise at a marginal pace. Moreover, job creation continued for the seventh successive month, with the rate of growth the quickest since April 2019. Firms also remained confident that activity would increase over the next 12 months, with optimism reaching the highest since June’s series record.


During Q2, earnings growth on a year-over-year basis reached a record 92%. While the 28% growth projected for Q3 doesn’t seem as notable, it is important to put it into perspective. It is nearly 4x the average over the last 15 years! Similarly, sales growth will be above average, as the projected 14% increase will be the second strongest quarter over the last 10 years. But both earnings and sales growth are expected to slow as economic growth gets back to a more ‘normalized’ period.

Q3 ’21

It’s still very early in earnings season but results for the 99 companies reported are running at the same sort of dramatic pace that defined company reports since the middle of last year. The aggregate beat rate at 87% would be a record for this group of companies. So far there have been just 10 EPS misses out of 99 reports. Revenues are also topping forecasts handily with just shy of 75% of reports coming in above forecasts. That’s slightly weaker than last season but still extremely strong versus history.

Guidance is still very strong as well, with 12.6% of companies raising guidance so far. That’s about as strong as guidance raise rates ever get, except for last quarter when guidance raises topped 16%. Guidance cuts are also extremely low versus history. It’s fair to say that management teams are still in general feeling increasing confidence about the outlook despite an impressive string of optimistic quarters over the past year or so.


S&P 500 2022 earnings growth is expected to slow to ~10% (adjusted for the likely increase in corporate taxes to 25%), but that should remain supportive of a continued bull market. Another dynamic to put into perspective is that the five-quarter streak of an aggregate earnings surprise of 15%+ is likely coming to an end. That level of ‘beats’ is unprecedented and likely to be ‘only’ 8% to 10%. That is still almost double the historical average!

The Daily chart of the S&P 500 (SPY)

In the past week, the S&P 500 has rallied 2+%. In the process, it vaulted over resistance, set a new high, and moved into a slightly overbought condition. While the broad S&P 500 has broken out, so too have several individual sectors in their respects.

The seven-day winning streak came to an end on Friday as the S&P 500 flatlined losing only 4 points. Perhaps the index is somewhat extended, and it would not be a surprise to see the rally take a breather.

My Playbook Is Full Of Opportunities For 2021.

Last week we reviewed the forecasts for a deep market correction that sent some investors wondering what to do with their equity portfolios. Morgan Stanley’s Mike Wilson has been one of the most vocal, by reiterating his 10-20% correction announcement with his latest fire and ice, 20% or more correction is coming forecast.

Mr. Wilson likes to stir the pot with his calls for deep declines and so far he’s been DEAD wrong. I highlight the word «dead» because that is where an investor finds themselves if they happen to listen to this guy.

It has certainly been a nice ride in the equity markets since March of 2020 when the «buying» began at S&P 500 2200. It now trades at 4544 for a gain of over 100%. I have been watching equity markets for many decades and this rally has lasted so long it is astonishing because there have been little to no give-backs along the way. Before the pandemic, I mentioned that this secular bull market could be a once-in-a-lifetime event. This 18-month rally reconfirms that notion. Those that have stayed the course (especially since 2020), have experienced a life-changing financial event.

For some, this is a big surprise. However, looking under the hood, it isn’t. When you have low taxes fueling a resilient corporate America leading to a HUGE earnings rebound and a «V» shaped economic recovery it’s quite reasonable. This isn’t rocket science, and it is not hindsight. It’s been forecast here since April 2020. There have been NO real «corrections» since the lows of March of 2020 as this rally has left anyone not willing to «pay up» for stocks standing on the sidelines while stocks soared. Many individual investors and money managers found themselves in that «spot», as they paid attention to the economic/stock market worries expressed by the media.

A Bifurcated Scene

At the moment the intermediate-term trend remains in place and it is positive. The short-term scene is a function of what we can or cannot expect out of Washington D.C. When it comes to the investment scene, that backdrop is tilted to the negative side of the equation. How much of a negative will depend on the size and scope of the spending and tax legislation.

However, I watch something that trumps ‘noise’; Price action. And that is telling me how to proceed. Look at the positive across-the-board results recently. Financials, Energy, Consumer Discretionary, Solar stocks, Uranium stocks, etc, are in rally mode. Transports have rallied back closing in on the former highs, and that is impressive in the face of rising energy costs.

Technology moves higher, as semiconductors are back in focus. The speculative ARK Innovation ETF (NYSEARCA:ARKK) moved back above resistance. After rallying 6+% during the week the index of FANG+ stocks is now back at a 52-week high. REITs have come off the lows and look very positive given their dividend yields.

These are across-the-board positives that signal the Secular Bull Market is alive, as we watch the issues that comprise the Wall of Worry take their toll on the uninformed investor. Still not convinced? The new highs for the S&P 500 and the DJIA disqualify all of the recent calls for an imminent 20% market correction.

Small Caps

While the Russell 2000 continues to trade ‘sideways», the Small Cap Value ETF (AVUV) just made a new high. That may be a sign that the Russell 2000 may follow and finally break out of that trading range.


Bespoke Investment Group:

The S&P 500’s market cap has increased by more than $6 trillion this year, leaving the index’s total market cap above $40 trillion. The Technology sector makes up more than a quarter of the index’s market cap at nearly $11 trillion. The next closest sectors are all right around the $5 trillion mark. Consumer Discretionary, Health Care, Communication Services, and Financials. There are also four sectors that barely add up to $4 trillion combined: Energy, Real Estate, Materials, and Utilities. The four largest stocks in the S&P 500 — Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) — have a combined market cap that is $8.3 trillion, more than two times the size of the four smallest sectors.»

Consumer Discretionary

The sector ETF (XLY) continues to make new highs this week. While a few components are overbought in the short term others have plenty of room to rally higher. Selectivity is the key. Savvy favorite Netflix (NFLX) posted an all-time high on the back of a positive EPS report. Those that followed the advice to «accumulate» are being rewarded.

Amazon and Tesla (NASDAQ:TSLA) have been pulling more than their fair share for the S&P 500 and that also means the consumer discretionary sector itself has been on a stellar run having risen over 5% in five days; the best five-day run since a 7.18% gain this past March.

While currently elevated, this week’s move has marked a dramatic break out above the summer high. Additionally, its relative strength line versus the broader index has also made a significant breakout from the past year’s downtrend. All Bullish signs.


I mentioned last week that I have been fortunate to be involved in the Agriculture space. My decision to buy into an ETF rather than singling out one stock has worked out well. The Agribusiness ETF (MOO) was at resistance last week as we discussed;

«A break above resistance and the probability for higher prices increase dramatically.»

That is exactly what occurred on Wednesday, and this ETF remains a buy-on dip situation.


If you think Treasury yields are going to continue to work higher, as I do, you should be overweight financials. That has been my message for a while now. The Financial Sector ETF (XLF) posted 4 straight days of new highs, took a one-day pause, and set another new high of Friday. Of course, that means new 52-week and all-time highs in many of the components of the XLF. Many regional banks I own reported stellar results pushing the Regional Bank ETF (KRE) to a record close.


Oil prices are at seven-year highs, and some are wondering when the industry is going to get out of austerity mode (i.e., ramp spending back up). The data shows that the answer is an emphatic NO. Despite the robust year-to-date gains in the oil and gas markets, there is virtually no acceleration in spending. With all of the uncertainty in energy policy here in the U.S., capital discipline is here, and it will be here to stay until the anti-fossil fuel policies are removed.

U.S. E&Ps upsized budgets by an average of 4% — but even with that, they are still tracking to spend less than in 2020. Oil exploration and production companies are only reinvesting ~40% of their cash flow back into the business. Therefore, the majority of cash flow is now returned to shareholders (dividends, buybacks) and/or the balance sheet.

What matters for the industry today is cash flow, and that couldn’t be more bullish. The sector has plenty of tailwinds. The decision to go «green» before it is a viable alternative will continue to place the traditional energy sources back in a positive secular trend. Only a complete reversal of «green sentiment» (unlikely) reverses the new trend.

After a parabolic run, Nat Gas is in pause mode. I do not believe the rally is over, and to that end, I increased exposure to the sector., adding a mall cap Nat gas producer this week.


The ETF (XLV) that tracks the sector has been in a funk since making a new high in September. The group has made a total round trip from the June breakout level. New highs were made in September and now the index is back to the June levels. It appears this «test» of support has been successful. I believe the sector gets its mojo back and while it could trade sideways for a while, I doubt we have seen THE high in the sector.

There is plenty of «value» with above-average dividend yields and growth companies that have a solid future. The Johnson & Johnson (JNJ) EPS report just told us the medical device companies are ready to come back to life. JNJ itself is inexpensive, a dividend aristocrat yielding 2.6% that has paid dividends for 59 years, and it is a BUY.


The crowd that didn’t like the tech sector because they were afraid of interest rates rising may be lamenting that notion. The 10-year Treasury closed at 1.68% on Thursday and as noted earlier every area of the Tech sector that I own or track is doing very well.


The ProShares’ Bitcoin ETF (BITO) started trading this week, and bitcoin assets continued to rally on the back of that news. That brought interesting price action in the Grayscale Bitcoin Trust (OTC:GBTC). While bitcoin was trading just below the former high, GBTC, a trust that tracks bitcoin via private placement, dropped 4% over the last couple of hours of trading on Tuesday, likely anticipating rotation into the more liquid ETF tracking futures on Wednesday.

While a futures-based ETF is likely to be more liquid than GBTC due to its structure, there are some disadvantages. One of them is «roll» costs, which are incurred when a «futures long» has to buy the out-month and sell the expiring front-month contract. This will lead to the Futures ETF underperforming Bitcoins itself. The current costs are equivalent to approximately 10% per year.

The drop in GBTC was a knee-jerk premature overreaction. The ETF rebounded posting a 6.9% gain on Wednesday. Bitcoin rallied up to, then exceeded its old high ($64.9k) rallying to the 66k level. However, there was no follow thru and before we could say «reversal» it traded down to the 60k level. Such is life in the crypto world, but from a technical perspective, the quick reversal is a concern. There now exists what technicians call a double top pattern and that could pose problems for the crypto BULLS in the short term.

For those that are interested in getting involved waiting for a move back to support levels would be an opportune time to initiate or add to positions. In the interim, I took profits on my trading position and left my CORE GBTC holdings intact.

No matter what your opinion is about this «asset», it continues to gain credibility in the markets, and that is very hard to ignore.

Here is an interesting observation that also indicates the adoption of Bitcoin by the investment community.

Final Thought

It’s important for policymakers and investors to not miss the forest for the trees: the economy is in good shape, people are finding work, and production is ramping up to meet strong demand. The Fed will taper in November and may hike rates as early as next September. In the interim, IF fiscal policy can cool down due to demands from Senate moderates to keep any further bills much smaller than what is being proposed. it will go a long way in keeping the recovery in place. Stray too far from the policies that ignited this economy and the stock market rebounds and all bets are off.

As long as demand remains strong, companies will work to contain and unlock the supply issues to maximize their profits. To echo JPMorgan CEO Jamie Dimon: «there’s not one company that is not working aggressively to fix their supply chain issues.» Companies will have to continue to convince the market that their tactics (e.g., Costco chartering ships, Lennar undergoing SKU reductions, FedEx expanding hours of operation, etc.) to unlock the supply constraints will be successful to power another healthy earnings environment in 2022.

The bottom line, the resiliency and flexibility of U.S. companies to alleviate much of these pressures by mid-year 2022. Yes, despite the rhetoric of what is «supposed to happen», Corporate America will «fix» the issues.

From an investment perspective, there is only ONE issue that needs the attention of investors. Despite what some market participants want to believe, ANYTHING that handcuffs Corporate America is toxic to investors. Solid corporate earnings WILL power the stock market higher.

The stock market has agreed with that premise for decades, and that continues today.

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