The S&P 500 had five record closes in a row this week, and fourteen so far this year, for what it's worth

The S&P 500 averaged 6,029.95 in June. 

Using 1Q2025 GDP, current valuation of SPX 6,388.64 is 213, 163% higher than the 1938-2019 mean of 81.

Full year valuations around 213 were last seen in 1928-1930: 204, 248, and 228.

Real return since August 2000 through June 2025, two months shy of 25-years, is now up to 5.08% per annum vs. 10.75% per annum October 1975 through August 2000.

The mouse that roared. 

 

SPX closes at another fresh record: 6363.35

 

SPX closes at 12th record of the year

 6,358.91

From the story here: 

... “So far, the tariff strategy Trump is pursuing looks very inspired, generating serious income, resulting in major investments in the U.S. to avoid the tariffs, and has yet to cause the disruptions and inflation that the naysayers said were certain,” said Louis Navellier, founder and chief investment officer at Navellier & Associates. “The stock market certainly reflects no fear of negative consequences.” ...

 

 

SPX since August 2000 continues to underperform the pre-Reagan era by almost 20% in real terms, the Reagan bull market era by almost 68%

SPX 8/2000-5/2025: 7.62% per annum nominal, 4.95% per annum real (inflation rate 2.54% per annum)

SPX 1/1871-7/1982: 8.15% per annum nominal, 6.18% per annum real (inflation 1.86%)

SPX 7/1982-8/2000: 18.99% per annum nominal, 15.28% per annum real (inflation 3.22%) 

 

We'll get the June 2025 Consumer Price Index report on Tuesday July 15th. The previous read was 2.4% yoy overall, and 2.8% yoy for the core.  

SPX vs. gold since 1913

 

Gold 1913-2025 ($20.67-$3500.05 peak on April 22, 2025): 4.689% compound annual growth rate, nominal.

The S&P 500 did better than that in nominal terms.  SPX 4/1913-4/2025 (8.79-5369.50, monthly average prices): 5.895% compound annual growth rate, which does not include dividends reinvested; the nominal per annum plus dividends reinvested produced 10.14% total nominal per annum.

In real terms the $20.67 price of gold in April 1913 is only $676.62 in April 2025, or 3.164% CAGR inflation over the period. So in real terms gold is up just 1.478% per annum over the period (from $676.62 to $3500.05). 

Again in real terms SPX is up more, 2.65% per annum without dividends reinvested over the period, and even more with dividends reinvested, 6.76% per annum.

Spot gold on July 4th was lower than in April, at $3329.67. 

SPX made a new high for the Fourth of July.

 

 

S&P 500 closes at another new high today

 

Every major bank passes stress test from the US Federal Reserve

507 banks failed in the United States 2008-2014 inclusive, costing the Deposit Insurance Fund nearly $90 billion. Many millions of homes went into completed foreclosure.

 

Big banks all pass the Federal Reserve’s less vigorous stress tests

 

... All 22 banks tested this year would have remained solvent and above the minimum thresholds to continue to operate, the Fed said, despite absorbing roughly $550 billion in theoretical losses. ...

 

Under this year’s hypothetical scenario, a major global recession would have caused a 30% decline in commercial real estate prices and a 33% decline in housing prices. The unemployment rate would rise to 10% and stock prices would fall 50%. In 2024, the hypothetical scenario was a 40% decline in commercial real estate prices, a 55% decline in stock prices and a 36% decline in housing prices. ...      

 

The 2024 benchmarks are a mixture.

 

Commercial real estate prices year over year fell more than 11% in 4Q2008, and more than 30% in 4Q2009. Planning for a future 40% decline seems appropriate.

 

The 2007 shock to the median price of houses sold was only 19% 1Q2007-1Q2009, with prices not recovering until 1Q2013. But since the median price of houses sold has jumped by about 31% just since 2020, planning for a future 36% decline is more than appropriate.

 

Unemployment peaked at 10% in October 2009. The civilian employment level contracted by almost 7 million 2007-2010 on an average basis, and did not recover until 2014, seven long years later. Pandemic unemployment peaked at 14.8% in April 2020. We got as high as 10.8% in November and December 1982. Great Depression unemployment peaked at 25.59% in May 1933. This one is a crap-shoot. 

 

The average price of the S&P 500 fell 50.8% between October 2007 and March 2009, but in 2007 the S&P 500 was valued about 26% above the long term mean, not 130% as in 2024.

 

That's the datum that worries me. Just to get to its historical median value of 81, the S&P 500 today would have to fall 61%, to about 2425.

 

Imagine the howls. 

 

 

 

  

 

S&P 500 closed at a record of 6,173.07 on Friday 27 June 2025

 

S&P 500 closes at a record Friday, overcoming even more trade angst

1Q2025 real GDP revised down 0.3 to -0.5 in third and final estimate on an increase in imports front-loaded into 1Q to avoid Trump's tariffs

 Real gross domestic product (GDP) decreased at an annual rate of 0.5 percent in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4 percent.

 

The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment and consumer spending.

 

Real GDP was revised down 0.3 percentage point from the second estimate, primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports. ...

More.

Sounds like Howard Lutnick gobbledygook at the end there. Paragraph two speaks of an increase in imports. Paragraph three of a downward revision to imports. 

Which is it lol? 

Nominal 1Q2025 GDP clocks in at $29.962 trillion in the third estimate. SPX was at 5612 on Mar 31, yielding a crazy high stock market valuation of 187.  

I guess stocks didn't like the monthly Treasury statement indicating worsening fiscal conditions lol

 

Secular real return from stocks since investing at the August 2000 high compared with investing at the September 1929 high, twenty-four years out

 August 2000-August 2024 and September 1929-September 1953 both fall far short of 8.74% per annum real return September 1953-August 2000.

Real per annum return from January 1871-September 1929 was 8.34%.

 

 

 

We'll probably never know whether weak Russian invasion of Ukraine headlines like these at CNBC contributed to Trump's thinking that Ukraine started it

Shrinking from calling what Russia did an invasion was a temporary flight from reality for CNBC, probably motivated by keeping people from panicking and selling stocks.

It's all about the money, for Trump no less than for CNBC. And also for Vladimir Putin.

It should be about something else.

 

Trump's phony Liberation Day for working Americans evaporates into thin air, new 90-day pause brings 145% reciprocal tariffs on China, which tanked markets in early April, down to 30%

Stock futures surge. Crude oil surges. US Treasury yields surge.

U.S. and China agree to slash tariffs for 90 days in major trade breakthrough

 

... The trade agreement means that “reciprocal” tariffs between both countries will be cut from 125% to 10%. The U.S.′ 20% duties on Chinese imports relating to fentanyl will remain in place, meaning total tariffs on China stand at 30%. ...

Trump had imposed tariffs of up to 145% on Chinese imports, prompting Beijing to respond with retaliatory curbs of its own, including restrictions on some rare earth elements. ...

Trade tariff manipulation is a stock-trading racket for them

Tariffs were enacted April 2, then suspended April 9.

 

One month ago:

 

 

 

 

 

 

 Yesterday:

 

This morning.

Over a year ago, in January 2024, Trump said Biden's stock market was his, now in April 2025 his stock market is Biden's

 Absolute 🤡 show.

 

 

 

Nosebleed valuations continue despite recent stock market declines

 It's a long way down to normal.

The 2022 lows got us back only to the 2000 high, and people thought it was the end of the world when all it was was a good beginning lol.

 

Nominal GDP in 1Q2025 is estimated at $29.9776 trillion by the BEA this morning.

$SPX closed at 5611.85 on March 31, 2025.

That yields a ratio of 187 vs. the historical mean of 81, or 131% overvalued. 

Guru Focus gets similar results from the Buffett Indicator:

 

The US Secretary of the Treasury Scott Bessent is under fire for market manipulation because he made closed-door comments yesterday morning to big shots gathered for IMF and World Bank meetings

 Bloomberg published the story just before noon on Tuesday reporting the closed-door meeting where Bessent said he expected the tariff stand-off with China to de-escalate, and that the current situation, which amounts to a trade embargo, is unsustainable and will de-escalate in the very near future.

Markets opened Tuesday morning strongly higher and by 11:00 AM were up 110 points on the $SPX. 

The Secretary of the Treasury shouldn't be having closed door meetings with the very people most likely to profit from what he has to say.

This is quite literally fascist economics.

Citigroup profits rise 21%, stock trading revenue rises 23%

 CNBC:

Citigroup on Tuesday posted first-quarter results that exceeded analysts’ estimates as the firm’s traders generated more revenue than expected. ... “increased market volatility” and higher client activity led to more transactions ... a boom in equities trading revenue as the banks took advantage of volatility in the quarter. ...

Bank of America overall profits up 11%, stock trading revenue up 17%

Bank of America on Tuesday posted first-quarter results that topped analysts’ expectations for profit and revenue on stronger-than-expected net interest income and trading revenue. ...

JPMorgan Chase, Morgan Stanley and Goldman Sachs each exceeded analysts’ estimates on a boom in equities trading revenue as banks took advantage of volatility in the quarter.

More.

Morgan Stanley: But we'll be there for ya!

Morgan Stanley: Expect to be ‘fooled many more times’ on tariffs