Dow, Nasdaq100, and S&P all 5% from all time highs !
To me this makes no sense. I mean lower CPI means less pricing power and lower selling prices for corporations. At the same time, the fed is vowing to hold rates at 5.25% or more for some time. Rationally thinking, this would mean corporations would make less profits from lower selling prices and higher interest costs, assuming the same demand. Now with consumer buying power waning($500B vs $2T 2 years ago), I don't see how consumers will be in a position to keep spending at the same rate. So my question to anyone who thinks the present 20 PEs in the S&P, and 30 PEs in the Nasdaq going forward are justified, and that we're in a new bull market that will keep going, to please explain on a fundamental level, how this will happen.
