Stockmarket bulls drive share prices to record highs
Despite shortages of semiconductors and workers, the energy crisis and ongoing pandemic-induced dislocations, stocks are at record highs.

“Nothing gets in the way of the equity bulls,” says Ipek Ozkardeskaya of Swiss banking group Swissquote. Despite shortages of semiconductors and workers, the energy crisis and ongoing pandemic-induced dislocations, stocks are at record highs.
Strong earnings
America’s S&P 500 index produced its best weekly performance in almost three months last week. The momentum continued into this week. On Monday all three big US indices – the S&P 500, the Dow Jones Industrial Average and the tech-focused Nasdaq – closed at record levels, say Caitlin Ostroff and Alexander Osipovich in The Wall Street Journal.
On the other side of the Atlantic, the pan-European Stoxx Europe 600 also hit an all-time peak; France’s CAC 40 posted its first record close in 21 years. Fears that global supply-chain problems would erode earnings have been eased by a strong third-quarter earnings season in Europe and on Wall Street. “About 82% of S&P 500 companies that have reported so far... have beaten analysts’ earnings forecasts.”
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
US stocks have bounced back from a rough patch in September, when they fell by more than 4%, says Maggie Fitzgerald for CNBC. The S&P 500 gained 7% in October. Up 24% since 1 January, American stocks look on course to finish the year in good spirits: historically, “when the S&P 500 is up more than 20% in the first ten months of the year, performance…for the remainder of the year was positive every time, according to Bespoke Investment Group”.
November heralds the start of “the best three-month stretch… for stocks”, says Jacob Sonenshine in Barron’s, with an average return of 3.4% during the three months to the end of January. That’s not just “happenstance”. Many Americans wait until the end of the year before putting money into their investment accounts. The buying often drives an end-of-year rally.
Trouble ahead
US corporate earnings growth is set to slow sharply in the year ahead, says Mark Hulbert for MarketWatch. Forecasts from Standard & Poor’s show that earnings per share are expected to grow by 84% year-on-year during the third quarter. Such a huge gain is unsurprising after a pandemic-blighted year, but the outlook further ahead is less impressive: come the final quarter of 2022 earnings may be growing at just 10% year-on-year. As markets are forward-looking it may not be long before that starts to feed into weaker stock prices.
The list of challenges facing the world economy (and thus profits) is growing, says Tom Stevenson in The Daily Telegraph. “Inflation, broken supply chains, rising energy costs”, tighter money, high valuations and “stretched profit margins”. During the past 60 years, US stocks have endured at least one correction – a drop of 10% – during the three years after every big bear market’s bottom. Yet a year-and-a-half on from the March 2020 market nadir and the S&P 500 has still not had a double-digit decline. “Even if it is not imminent, a correction will happen at some point.”
-
The 30 house price hotspots
While we have seen house prices sliding, these sought-after locations have seen prices jump by at least 5% over the previous 12 months
By John Fitzsimons Published
-
Working parents will be entitled to 15 hours free childcare for two-year-olds from next year
The government has extended free childcare hours to working parents of two-year olds but it won’t be automatic so make sure you don’t miss out
By Marc Shoffman Published
-
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
By Dr Matthew Partridge Published
-
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
By Jane Lewis Published
-
Three defence stocks set to flourish in an era of instability
A professional investor tells MoneyWeek where he’d put his money. Tom Bailey highlights three defence stocks that look promising.
By Tom Bailey Published
-
EasyJet shares are volatile but enticingly cheap
The EasyJet group has shrugged off the cost-of-living crisis, restarted dividends and shares look good value.
By Dr Matthew Partridge Published
-
The fallout from the war on landlords
Investors fleeing the market and the rise in rents are affecting us all.
By Charlie Ellingworth Published
-
Eight small-cap trusts to bet on
Funds investing in market minnows are out of favour, but the cycle will turn. Here are the best bets.
By Max King Published
-
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
-
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published