It's been a wild ride with the S&P up and down with each result but, in the end, we're back where we started from and that's pretty much the all-time high at 4,382 this morning. 4,420 was the actual all-time high and that was way back yesterday but we started the week at 4,400 – so none of this is impressive. Still, neither AAPL or AMZN were any help to the markets and those two companies are 10% of the S&P 500 by themselves – that speaks well for the broader strength.

The Nasdaq started the week at 15,100 and is down 250 at 14,850 – still digesting AMZN's warning that it's not going to actually get better for the delivery giant, now that people can leave their homes again but there's still hope as the Delta Variant of Covid is shutting the World back down, so maybe AMZN does have another record quarter ahead of them?

Generally, earnings have been good and estimates for Q3 and Q4 are rising – ignorning the Delta Virus so far:

S&P 500 earnings

Q3 estimates

Today: up 28.3%

July 1: up 24.7%

Q4 estimates

Today: up 20.3%

July 1: up 17.3%

Source: Refinitiv

If those hold up, then 2022 estimates may also be too low but the undercurrent, so far, is that many companies have reported substantially higher commodity and, in some cases, labor costs, but most have been able to pass the higher costs on because consumers are flush with cash. S&P 500 margins have been hovering around 13% – record highs for the index and not likely to improve. The first round of inflation is clearly being won by the corporations – who have excuses to raise prices – whether they need to or not.

Traders are also playing the market as if the Fed will never raise rates and that the FREE MONEY train from Washington will never end either. Even with the optimistic outlook on 2022, we're still trading at 25x forward earnings – anything that goes wrong from here could be catastrophic.

Economy’s Prospects Looked Bright, Until the Delta Variant Surged

China Tech Selloff Resumes

Procter & Gamble Warns of Higher Costs and Slower Sales

But, until then, party on!

Have a great weekend,

- Phil