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Jack Janasiewicz discusses the strong start to the year for equities, anomalies in the most recent inflation data, and key differences between today’s Magnificent 7 and the dot-com bubble.
  • The S&P 500® breached the 5,000 level but it wasn’t the only index making new all-time highs in February.
  • Japan’s Nikkei, the German Dax and the French CAC 40 all set new records during the month.
  • In the US, both the Consumer Price Index and the Producer Price Index came in a touch higher than expectations, and the odds for a May rate cut from the Federal Reserve largely evaporated.
  • But corporate earnings were strong, even beyond the Magnificent 7 tech stocks.
  • While we wouldn’t be surprised to see some profit taking or consolidation, that has yet to play out.
  • Flows into equity ETFs and long-only funds were at a two-year high – plenty of evidence that money is finding its way back into the market with hints of FOMO and buy the dip.
  • What about the bubble talk? If you compare today’s Magnificent 7 companies to the blue chip tech names from the 2000 era, their revenues and net income are more than ten times greater.
  • Can these names continue to meet expectations for future growth rates? That remains to be seen.
Past performance is no guarantee of future results.

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