Have you noticed the tendency we all have of asking “What’s wrong with the market?” This negative slant on questions has become a fixation, evidenced by our obsession with calling every asset a bubble. We have gotten into a frame of mind that allows us to believe that everything will end badly.

The contrarian fellow inquires “What’s right with the market?” to get his mind to travel in an altogether different direction. When we start contemplating what’s right, we change our whole method of thinking. We get an entirely fresh perspective on things.

Here’s a list of things we find that are right with the current market:

Stock market has continued to rally even with record surges of new Covid-19 cases across America. Daily deaths are not rising and remain 63 percent off their peak reached in April.

The global economy was devastated in the first half of the year but there is evidence that the worst is behind us. Services, industrial activity and consumer spending have all shown signs of improvement. Housing is a bright spot. In 2021, global growth is projected at 5.4 percent.

Two-thirds of Americans received more in government handouts than they lost in earnings because of a $600 weekly enhancement to state unemployment benefits through July 31. Even if Congress fails to replace it with something, the increase in savings should prop-up aggregate demand. Bank of America, which touches half of US households, said checking accounts have 30 to 40 percent more money in them compared with 12 weeks ago.

We should return to pre-pandemic level of earnings for S&P 500 companies by the end of 2022, much quicker than previous episodes. It took four years to get back to peak earnings after the Great Recession. During the Great Depression it took over a decade.

There is a revival of government activism with no end to fiscal and monetary support. The crisis has catalyzed lasting change in the attitude of policymakers.

Adam Smith fathered the economic philosophy which guided capitalism up to the time of the New Deal and the Keynesian doctrine. This was followed by Milton Friedman’s monetarism and the golden age of central banks. Now we are witnessing another monumental shift in the intellectual zeitgeist to Modern Monetary Theory (MMT).

“Unfortunately, because of the crisis, we have actually taken a number of steps which are heading into new territory,” said Dallas Fed president Robert Kaplan. “We’ve done some version of MMT to deal with this crisis.” Higher rates of nominal GDP growth now seem very likely.

The US budget deficit could hit 20 percent of GDP this year and debt to GDP could eventually exceed 125 percent. But debt service costs are manageable. Even if the 10-year yield moves to 2 percent, that’s still only 2.5 percent of GDP in interest payments, lower than 3.2 percent peak in 1991.

Global bond issuance has soared to an all-time high, led by US corporations. The likelihood of rating downgrades and defaults persists but junk issuers have raised more than $120 billion in the second quarter, the most on record. S&P Global Ratings forecasts global bond issuance will increase 6 percent this year.

In the second quarter, 38 IPOs raised $15 billion in total. Nearly every IPO upsized or priced above the midpoint. On average second-quarter IPOs rose 38 percent on their first day of trading. ZoomInfo and Vroom showed a demand for highly-valued growth IPOs, even unprofitable ones. China’s IPO market is also “sizzling hot” according to China Renaissance CEO Fan Bao.

So far this year, there have been 40 SPAC IPOs that have raised $16.3 billion. Bill Ackman’s $4 billion Pershing Square Tontine Holdings is the largest ever blank-check IPO. The milestone is one more sign of animal spirits returning. The SPAC has 2 years to buy a real company or the money gets returned to the investors.

Valuations are elevated by historical standards, but not stratospherically so. The S&P 500 forward price-to-earnings (PE) ratio at 22 times is yet to exceed the 2000 peak at 26 times. As we enter unchartered territory for fiscal and monetary policy, it only makes sense we should enter unchartered territory for valuations. Tech relative to S&P 500 still needs to make new all-time highs.

Apple, Amazon, Facebook, Google and Microsoft are up 35 percent collectively in 2020 while the remaining 495 companies in the S&P 500 are down 5 percent. These five stocks now account for 23 percent of the S&P 500 market cap (up from 18 percent at the start of this year) and 40 percent of NASDAQ.

Contrary to conventional wisdom, such concentration of returns is common. A 2017 paper by Hendrik Bessembinder, a professor at Arizona State University, found that the best-performing 4 percent of listed companies account for the entire net gain of the US stock market since 1926, with the rest collectively only matching the returns that could have been found in Treasury bills.

The proliferation of passive investing will fuel this dynamic further. BlackRock anticipates assets in invested in ETFs and ETPs listed will double to $12 trillion over the next 5 years. Global hedge fund assets are $3 trillion.

Stocks rallying despite dismal economic conditions and extreme uncertainty is quite normal throughout history. But when prices are moving contrary to general expectations, our minds get into a rut of worry or resentment. If we have mentally accepted that we are in a bear market, we are not inclined to change our outlook until the new bullish trend becomes too obvious to ignore. It takes considerable time to shift our viewpoint.

This week’s bullish sentiment reading ranks among the 40 lowest out of the more than 1,700 weekly readings recorded over the AAII sentiment survey’s history since 1987. Separately, Conference Board data show more consumers expect stocks to fall than rise over the next year. This is bullish from a contrarian standpoint.

We are still early in this carnival of wild speculation.

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