Fundamentals – Stocks have gotten cheaper over the past year, at least by one measure. That's right, despite the S&P 500's almost 30% appreciation since last August, the average price you pay for a dollar of earnings of S&P 500 companies has gone down. I promise I'm not on drugs, allow me to explain. Put simply, growth in earnings has been and is expected to continue to outpace growth in stock prices. Since its high of 23.6, the S&P 500 forward P/E has trickled down to 21.2 while stock prices have shot up as the market expects earnings to continue improving. Judging by the recent earnings szn, this could seem obvious, but it is a solid argument against the nightmare-inducing bubble thoughts in the back of investor's minds.
Consumer Sentiment – While sentiment around future earnings spikes up, consumer sentiment of the economy has taken the opposite route. Tom Brady's alma mater, University of Michigan, released the latest consumer sentiment survey, indicating one of the steepest drops in the history of the dataset. To sum it up, the Delta variant is spooking consumers far and wide. With many states and city governments signing stringent rules around virus safety protocols into law, combined with reignited calls from the CDC for mask wearing, it seems like consumers have reason to be concerned. Currently, sentiment sits around where we were when this whole pandemic thing started. But if this is what it takes to get JPow to send another check my way, I guess I can't really complain.