The Rising Influence of Rising Affluence

[santafe2]

Prior to the pandemic the SPX reached ~3,400. Everyone thought the market was overbought and due for a pullback. Then we got the pandemic flash bear. By the end of 2022 the SPX was up over 40% - above 4,800 because the government had injected so much cash into the system through outright helicopter Ben'ing cash to the populace, allowing people to stop paying rent and sometimes mortages, stopped student loan payments and zeroed out the cost of borrowing. Those days are over and it will take longer than must of us think for the system to rebalance. To my mind we're close to fair value here with a top of around 4,600.