Major indexes concluded the trading day on a positive note, with the Nasdaq Composite (^IXIC) and the S&P 500 (^GSPC) achieving new all-time highs.

Yahoo Finance's Josh Schafer dissects the top takeaways from Monday's session, including the concentration of market strength in the technology sector, investor bullishness surrounding the S&P 500, and the potential implications of the US retail sales data for market dynamics.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Angel Smith

Video Transcript

The S and P 500 notching its 30th record close of the year.

The NASDAQ, keeping the streak alive with its sixth consecutive record, close for more on the market takeaways.

Let's get to the finance.

His very own Josh Schafer, Joshua Josh.

So we have more record highs for the S and P 500 the NASDAQ, and we also have more bullish call calls on how high the S and P 500 can go this year.

So this is from the past couple of days.

We had Evercore IS out with the most bullish target on the street, now at 6000, up from 4750 so you can see a flip there, Really, From Julian Emanuel, we have Goldman Sachs boosting their year end target to 50,600 from 5200 earlier this afternoon, after these two, we had City follow and Citi now went up from 5100.

A trend to 5603 is a trend.

We have a trend, and people feel better overall right about where the index is headed.

Large Part of that is due to sort of the mega cap exceptionalism those Big Six stocks the Microsoft, the apples, the NVIDIA of the world that we talk about and how well those have perform.

But another interesting thing that now that we're at record highs, we talk a lot about stocks being expensive.

Right?

So the price to earnings ratio forward.

We're looking at the forward PE of the S and P 500 here above 20.

That's what strategists would call expensive.

We've been there for 100 43 days.

And what the big takeaway from this chart for me is, is yes, you can talk to your financial advisor right now, and they might tell you stocks are expensive.

Stocks can be expensive for a long time.

We were at this level for almost two years back at the end of covid in that post panem bubble.

And then we were at that level for more than two years.

Over 700 days when you go back to the.com bubble.

So my big takeaway from this chart being essentially yes, you can look at a lot of sentiment indicators that are gonna tell us we are stretched.

They're gonna tell us stocks are expensive, but that doesn't mean that the S and P 500 is gonna fall.

10% times can continue.

Good times can continue and they can continue for longer than we expect.

And that is why I think we're seeing some strategists come out and still be bullish, even after all the gains we've had concentration, concentration in the market goes with the winners, and everybody else is lagging.

Is that we're here when you look at the mag the mag seven contributions for this year to the S and P 500 Again, those big tech stocks over two thirds of the gains have just been from those tech stocks.

But when you look at the fundamentals, this is from Goldman Sachs, and they point out, this is earnings revision, so upward revisions to earnings over the last year.

We're looking at five stocks here.

Microsoft, NVIDIA, Amazon, Google, Meta 38% and the S and P 500 is flat and the rest of the S and P 500 is down.

So if we know that earnings are the key driver for stocks in the long run, this number would tell me those should be the stocks that are rallying, right?

So I think from that sense, you can sort of say, maybe a fundamentally backed rally.

Yeah, I was.

I thought it was interesting, Josh, like I If you were gonna channel your inner bowl and you would say If I believe you know, the economy is in decent shape and I'm gonna say, OK, I think it's gonna I think it's gonna continue.

Then you could make the case.

Well, if that's my thesis, then I would think, OK, there's a lot of potential catch up.

That's just gonna a catch up.

Josh.

That is one of Goldman's scenarios.

So Goldman says 5600, right?

That's right here in purple.

But if you look at yellow, that would be 5900.

That's a catch up scenario.

So that would mean big tech doesn't keep outperforming to an extended level.

But the rest of the stocks can come with a strong economy.

Now.

You could also have the big tech exceptions and we just talk about continue more A I We're talking about more earning speeds that gets you above 6000, and this is a growing case some analysts are seeing because we know Apple NVIDIA.

Those companies are continuing to surprise, right?

Really, I should probably just highlight NVIDIA there.

And video is surprising a lot.

And that's driving things up.

Also important to highlight Within this.

There's the catch down scenario, right?

So when we rely on big tech this much, if big tech disappoints, it could get us down here and to your point to the economy.

Josh.

If the economy let me disappoints, then of course, that might lead to lower earnings than we expect as well.

I give you the Jo the third Josh Shafer point.

Our final takeaway is simple.

It's the biggest thing to watch tomorrow.

It's a slow week of economic data.

Tomorrow we have retail sales.

We're looking for that number to come in at 0.3%.

It was flat last month, and I think the key thing to really just focus on there is it was flat last month.

Are we seeing the start of a trend, or is that trend reversing in retail sales?

Pick back up because, as you can see, we haven't had a lot of months in the last couple of years where we fall consecutively.

So if we're worried about that consumer.

That's gonna be a key number.

We we just I mean, basically, we we we've wrapped up earnings, right?

I mean, what what do you think?

Kind of some.

I mean, there was a lot of data points, a lot of conference calls.

Everybody's trying to get their head around.

American consumer.

What?

What's the Josh Schafer take?

It seems I I'll tell you what the consensus is, right?

Instead of my take, I'll rely on the people I talked to.

But it seems like the economists largely feel like we are slowing down, but not entering a slow down cooling, not crashing, cooling, not crashing.

So we'll look for signs of that tomorrow.

I think about 0.3%.

That's not impressive, but it's not bad, and it's not negative.

Take it