Markets surged higher on Wednesday and the FED Chair indicated that while the Fed would stop purchasing bonds by mid March, they would not raise interest rates until some time after that. He also indicated that there would be no sudden moves. Things would be gradual.
The S&P 500 responded by rising 1.6% while Toronto rose 0.6%.
Costco jumped 3.7% to a new high of $565. Clearly, I have underestimated appetite that investors have to push this stock higher. It’s now trading at an even 50 times trailing earnings and 46 times forecast forward earnings. That is very high especially in the face of predictions of higher interest rates.
Apple was up 2.85%.
It’s been a market where the best and most popular companies continue to go up despite often looking very expensive.
Meanwhile, a value stock like Melcor was down 1.6% and trades at 6.6 times forward earnings estimates.
The market is not spooked by the predictions of higher interest rates or by the Omicron variant. But that could change at any time.