On Friday, the markets returned to winning ways with the S&P 500 up 0.7% and Toronto up 0.9%.
Shopify was up a huge 11.8%.
Alcanna was up 15.6% after releasing Q3 earnings. That was surprising to me given that it has agreed to be sold to Sundial in exchange for Sundial shares. The reason for the gain was that Sundial released very strong earnings. I am not following Sundial.
Pre-market futures data as of Sunday night suggests that markets will open slightly higher on Monday morning.
Inflation is very much in the news but the market seems unconcerned.
And inflation could benefit some companies. Costco could report higher same-store sales simply due to inflation. And is they maintain the same mark-up then profits would rise. And if consumers are feeling the inch of high grocery prices, maybe even more of them will shop at Costco. But Costco’s share price could be hurt if interest rates rise substantially since that will tend to push P/Es down.
Note that I sent out two editions of my free newsletter in the past 10 days or so (November 5 and November 12). If you did not receive it, check your junk folder (the indignity!) and if still not found then you can sign up here. My young occasional collaborator, Zach Trease also sent out a newsletter recently with his own stock ideas focusing on smaller companies and you can sign up for that as well if interested.
The article I sent on November 12 about the S&P 500 valuation has a chart that shows the trend in S&P 500 earnings. I find it shocking how far above trend line the earnings currently are. And it seems “no one” is talking about it. The assumption seems to be okay, great and we keep growing from there. I’m not pushing any panic button about it but I would say it is a bit concerning to expect earnings to increase as a percent of GDP and stay that way.