They Aren't Printing Enough Money
I've been reflecting on some of the comments from other moderators on this subreddit recently.
It's true that we've suffered from some high inflation recently. Parking my entire portfolio into short-term treasuries does seem a little too conservative.
The prevailing opinion amongst bulls is that this can go on a lot longer - perhaps years.
I decided to search for a macro bull case to make long-term investments in stocks... (other than semiconductor pumping FOMO)
First, I decided to compare the S&P500 against M2 money supply. Oh dear, it appears we're at all-time highs.
OK, so the Nasdaq must be lower then, since we're seeing such great "earnings". Oh wait, we're much higher than the 2000 peak... hmmm
Well, maybe gold will tell me what to do. Surely that's going.... nope, still rolling over.
At least bonds yields won't compete with the market though, TLT is ugh.... about to test new lows.
Inflation expectations are clearly still high, but are they actually printing enough money? Maybe not...
Gas prices then? Lower energy costs stimulate economic... OH, they are at 2008 and 2022 levels, that's... fine! It's totally 200% fine!
The inflationary pressures are more a push into demand destruction right now, rather than a pull from disposable income.
Meanwhile, the FED is starting to lean away from dovishness.
Essentially, the bull case is about the momentum of AI datacenter buildout - just like it was about the momentum of internet fiber laying in the 2000s.
The Gartner Hype Cycle may be about to strike once again!