This issue is brought to you by:

“Just think, while you've been getting down and out about

The liars and the dirty, dirty cheats of the world

You could've been getting down to this sick beat”

- Taylor Swift

Friday 5000 Charts

The S&P 500 passed 5,000 for the first time this morning.

This is good news for our 401ks. But more importantly, it’s simply good news.

The 5,000 milestone is not just a number; It's a measure of the world’s ability to survive a pandemic, adapt to supply chain chaos, fend off inflation, grow the economy, discover new science, build useful things, develop new technology, and raise global living standards.

For all these reasons, I think we should be celebrating the S&P 500 at 5,000 as enthusiastically as Taylor Swift celebrates a Travis Kelce touchdown.

Among market participants, however, there’s a lot of grousing instead — mostly because so few had predicted it.

Monetary policy remains restrictive, so the naysayers don’t have the Fed to blame this time — Jerome Powell is not why NVDA is up another 50% this year. 

Instead, underperforming traders and off-target pundits have been reduced to bemoaning the dangers of passive investing.

(Note: Arm, which is in no indices, added an eye-popping $40 billion of market cap after a good earnings report this week.)

Macro bears don’t have much material to work with, either — the best they can muster is some tired warnings about commercial real estate.

(Even regional bank stocks have failed to heed those warnings.)

It’s not just US Mega Tech that’s doing well: 284 of the S&P’s 500 constituents are up on the year.

It’s not just the US, either: Japan’s Nikkei index hit a 34-year high this week.

And we might just be getting started: Sam Altman is raising $7 trillion to build semiconductor factories.

There is, of course, lots of bad news away from finance to consider. 

But if you spent too much time reading about politics this week, you might have missed the good news that science is making progress against cancer, Roman scrolls fossilized at Pompeii are now readable, fish can do math, and parrots like to swear.

Ok, fine. That last one isn’t necessarily good news.

But at least the parrots weren’t telling us to sell the S&P at 3,600, as so many of the pundits were.

The S&P 500 at 5,000 is a reminder not to let the prognosticators get you too down and out. 

Politics is bad for your portfolio:

Americans’ assessments of the economy are more a function of their politics than, well, the economy. 

This is getting worse:

Politics are increasingly distorting our view of the world.

What the pessimists have missed:

The S&P is up 1,000% since 1993. That includes a 19% gain over just the last 63 days, which is a 97th percentile move according to 3Fourteen Research. Pretty good!

An alternative:

US investors are warming to bitcoin as an investable asset: After a rocky start, flows into the new spot ETFs have turned decisively positive.

Is chocolate an investable asset?

It should be, but you’ll want to buy futures (because they don’t melt): Cocoa futures hit a record high this week.

Still very good:

US wage growth has decelerated to 5%, according to Fed data. That’s still too hot for the FOMC’s liking, but it’s getting toward the Goldilocks sweet spot of 4%-ish that will let the FOMC cut rates while we continue to earn more.

Even better:

It’s not just Silicon Valley that’s thriving: The poverty rate in rural India has fallen to 20%, from 70% in 2005. Wow.

The S&P 500 at 5,000 is a reminder that there’s more good news around then the biggest headlines and loudest commentators will have you think.

Have a great weekend, record-high readers.

― Byron Gilliam

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