0:00 spk_0
Now Brooke, based on what Sam was just talking about, September has been really strong. We've been able to buck a lot of those seasonality trends. What's Wall Street saying about the ability to maybe reach higher highs through the end of the year?
0:16 spk_1
Yes, we've heard lots of commentary from the street about how exactly far this run can go, including earlier this week, Goldman Sachs raising their price, raising their year-end target for the S&P 500. Also Wells Fargo, as well as other firms really raising that year-end target of what the S&P 500 could reach over the next 12 months. And really what we've heard, what it really all comes down to and city equity analysts pointing this out in a recent note that the key to market health from here is whetherearnings per share can deliver on the embedded expectations that they have. They said in a note that that's what makes this different than the late 1990s, the early 2000s, as we've seen this momentum, these strong reactions within the market to these companies, especially those tech and data and AI companies beating expectations and the return that they're seeing from investors. It's also worth noting Ryan Dietrich from Carson Group over there, the chief.strategists saying that typically when May, June, August and September as well as July happen to be strong when it comes to S&P 500, they have never seen November dip lower, but he did go on to say that October and December do tend to be down on average when it comes to returns. So something to keep in mind, especially as we head into that new month next week. But what we've seen over the past few months is really this strong momentum.continuing into what you have said a very volatile weaker month and we've seen record highs up until this week and it will be interesting to see ultimately what this comes down to today if this will be the first week of losses and the only week of losses in September or we continue to hold on to that momentum that we've seen, especially over the summer.
1:58 spk_0
So Sam, are we entering a phase where lofty valuations, they're just the new normal and stocks are going to continue to be expensive.
2:06 spk_2
Well, that's a possibility because when I look back over the past 20 years, I see that the S&P 500 is trading at about a 40% premium to that long term average on forward estimates. If I look at a 10 year average, then that premium is cut in half to about 20%.Uh, but on a 5 year basis because that's really when AI started to dominate the market cap, the earnings growth, the price momentum of the S&P 500, you could say that we're dealing with a high single digit premium. So yes, possibly we are.For some sort of digestion of gains, but as Brooke had mentioned, the 4th quarter tends to be pretty strong. And even if we have a positive August and September going back to World War II, the 4th quarter returns have been unchanged, still more than 4% with an 80% frequency of advance.
3:04 spk_0
And on a sector basis, healthcare has been a big laggard year to date.
