Riding High on Optimistic Vibes

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More individual investors are feeling optimistic right now than they’ve felt all year, according to our recent investor sentiment survey. And with stocks dancing around record highs, strong corporate earnings, and less bite than bark from tariffs, everyday investors are leaning into their favorite stocks and ETFs.

Kevin Gordon of Charles Schwab joins us for a vibe check and sets the scene for the rest of the year. Plus, IPOs are popping like it’s 1995 all over again and the gains are sticking—at least for now. What’s different and the same about this bull market compared to the one thirty years ago?

Links for Show Notes:

Full Transcript:

Caleb Silver  

On the Investopedia Express this week, the vibes are high, and we are trading on this bull market, though, is looking very skewing. Unemployment creeps up the income chain. Schwab’s Kevin Gordon drops in for some strategy for a few good minutes later on in the show. And IPOs are so bad, baby. The Investopedia indicator and what to watch this week, microphone, check one two. What is this? The Investopedia express all up in your business.

Welcome back and welcome aboard to the Investopedia Express, streaming live all over the social platforms and then on demand wherever you get your podcast. Thanks so much for joining the show on a Monday morning. Market’s a little soft. Coming into a week after dancing around record highs last week, we did have a record high for the Dow, though, and we’d love you to join the conversation. So chime in from wherever you are, all over the world. We know we got worldwide listeners and viewers from Trinidad to India to Taiwan to Tobago, everywhere you are. We’d love to hear from you. Thanks so much for joining the Express. We got a pretty packed show today. A lot going on in our little world of investing over here. But guess what? The vibes are high, as I said, investors as optimistic as they’ve been all year, according to our most recent Sentiment Survey, and I said earlier, the vibes, my friends, are immaculate. You got 67% of people saying they are optimistic, cautiously optimistic, or very optimistic, extremely optimistic about their investments right now. Again, that’s a high for the year. And why wouldn’t they be right? We got near record highs for stocks that’ll do that to you. We got risky assets surging in price. We got that going on. We got the potential for lower interest rates. Could be good thing. Could be a bad thing. We’ll see how that ends up panning out. We also have, you know, a pretty favorable tax environment for our corporations to profit, and we also have a very intense deregulatory environment, as the gates are open for companies to print as much profit as they want, as long as they are playing it straight with this administration. So you got record highs. We’re going to dig in to the results of our sentiment survey a little further down the show when we get Kevin Gordon from Charles Schwab on the program. But basically, investors feeling pretty good right now.

And when you look at the top performing asset classes this year, you got risk assets at the top of that chain, we got Bitcoin up nearly 28% falling a little bit this morning. All cryptocurrencies trading off this Monday morning to get things started on the week. But still, Bitcoin the top performing asset, and I put that in air quotes so far this year, next to gold rare. The Bitcoin and gold performed so well together. Sometimes people think they’re de correlated. We used to call Bitcoin the digital gold. We don’t call it that anymore. Bitcoin is Bitcoin stocks up about 14 and a half ish percent. So far this year, we’ve been through a lot. We’ve been through almost got to a bear market, but we didn’t 19% but we’ve we’ve been bouncing back pretty strongly, and it’s been pretty broad this rally, even though it’s heavily concentrated at the top investment grade bonds up a little better than eight and a half percent, and high yield bonds up 27 and a half percent. That tells you that investors have some risk appetite right now. And you know what? This bull market, though, kind of getting a little bit old. I’m not being ages over here, but this bull market, in terms of time period, is getting on in years. This from our friends at Bespoke investments. This began, this bull market on October 12, 2022. I remember it well. It’s now up 81% since then. That’s four percentage points above the median bull market gain and about 35 percentage points below the average bull market gain of 114% the length so far 101,038 days has now eclipsed both the median bull market 522 days in the average 1011 days. But bull markets that make it past the 1000 day mark have historically lasted much longer than that. It may be old, but it’s strong, and it might be getting stronger. And look at this chart here. Go back to that for a quick sec from our friends again at Bespoke.

This compares the performance of the NASDAQ back in the Netscape era. We went when it went public around the end of 1994 and what happened with ChatGPT when it hit the mainstream, so to speak, at the end of November in 2022 that Netscape run was much stronger, about 120% through 678 days ChatGPT. Everyone’s excited about AI, about the spend, about all these new companies that have come to dominate our markets. Well, in terms of market gain, it is actually trailing the Netscape gain. So that’s very fascinating. When you think about historical performance of industry changing events and Netscape, the browser, the Mosaic browser, was a industry game changer, but ChatGPT has really revolutionized the game. But performance has not been as strong as back in the Netscape days, and there are actually fewer stocks out there, and we had a little bit of a bubble in 1999 but the good news for investors, though, is we got a bullish skew. Yeah, Investopedia term—love that—a bullish skew in New York Stock Exchange. Breath, we’re talking about the stocks that trade on the stock exchange. There are over 2500 of them, and you’re looking at more Advancers than decliners. When you look at the NYSE and the NYSE got a pretty broad index there not all tech companies hardly, though they’ve had a lot of tech and AI and and cryptocurrency IPOs lately, but that’s good breath when you get that skew right, a more Advancers leading than decliners. We like to see that in a healthy bull market. And then, as I said, this bull market may be getting old, but it’s still got some strength in it. The economy, though, maybe heading in an absolutely different direction. We all know this stock market in the economy going in different ways, but when you look at stocks making all time highs, you get pretty good breath there. I didn’t just look at 52 week highs. I didn’t just look at three year highs or five year highs. I wanted to see stocks that were performing as best as they ever have in their entire careers as publicly traded companies. And there you have it, eBay, Goldman, Sachs, Reddit, meta, Lowe’s Corporation. I’m not talking about the place you get your hardware on the weekend. I’m talking about this diversified company that owns real estate assets and other companies retail assets as well. They’re big, real, of course, hotel company, but they’re pretty strong right now in Smithfield Foods. Hey, I see bacon there. I see meta advertising, I see banking, and I see Reddit on the internet. I see that as a pretty strong bull market. When you look across sectors and you look at what’s doing well, a lot of stocks doing pretty well right now, not just the mag seven or the top 10. That said the economy though, maybe heading in a different direction. I don’t need, don’t be, want to be Debbie downer on a Monday morning here, but we got to be realistic. And we know the stock market in the economy heading in different directions most of the time. They sometimes show up at the same picnic. But right now, I’m looking at rising inflation. We got those consumer price index and the Producer Price Index reports last week. We saw signs of tariffs bleeding in there. We saw higher services wages. We saw higher services actually driving PPI higher. We saw in consumer prices. You didn’t see it so much in the apparel area. You did see it in automotive and other areas, but you do see inflation ticking higher. Here. We got a weakening labor market. We know what happened with those prints back in July, and we know about those revisions in May and June, but we’re also seeing rising unemployment claims by middle to income households, and when that happens, you see spending start to taper off. That could become a concern. Good chart there from our folks at B of A, the B of A Institute there. Unemployment claims rising for middle to higher income households. And not only that, we got bankruptcy filings starting to tick higher. And good chart here from G2 Risk Solutions, they’re ticking higher in all kinds of interesting parts of the country, the North, Central, northeast. We got them on the West. We got them down south. So bankruptcy filings ticking higher, unemployment softening, and prices ticking higher, all of that could set us in for a little bit of a tailspin here. That said, don’t tell investors, because they’re pretty bullish on the stock market right now. Thank you very much. Miss Pac Man, it’s not game over yet. We got a lot to get through on the show. We’re going to bring in our good friend Kevin Gordon from Charles Schwab. He’s the director of research over there, Senior Investment Strategist. Let’s bring him in for the drop in.

You Kevin, so good to have you on the Express. Thanks so much for joining us. Appreciate you. 

Kevin Gordon  

Yeah, Hey, Caleb, how are you? And thanks for having me? 

Caleb Silver  

Well, we’re big fans of Schwab research here. We love the work that you do, you and the team over there, but I’ve got to ask you, given all this optimism lately, given the fact that we’re still dancing around record highs and there are tremors, and there have been concerns about tariffs and everything else so far this year. Are you surprised at the optimism among individual investors and even among institutional investors? Because we know that institutional investors are pretty bullish right now as well.

Kevin Gordon

Yeah, you know, it’s interesting. When you talk about optimism, I think you really have to sort of be specific on what part of the market or what survey you’re looking at, or even on the behavioral side of things, where you actually look at in terms of equity market positioning and positioning, I would say when you combine everything, whether it’s ETF flows or into mutual funds or single stock exposure, you’re not really at what I would think of as ultimately euphoric or two terribly optimistic levels. I think that sentiment sort of, you know, inching into that complacency territory, but evidenced by some of the surveys you were showing from your own whether it’s the cautious optimism bar being really high or even some of the skepticism, you know, still being relatively elevated. Even in attitudinal surveys, we’re not necessarily seeing this huge spike in. Bullishness, and that’s that’s been evident even in something like the AI survey. And you look at the percentage of bulls, it’s actually been, you know, rolling over, and it hasn’t been, you know, consistent with the market continuing to move higher and us continuing to kind of resume the march to to new record high. So I wouldn’t keep you know, investor sentiment in the in the worrisome column right now, or in the risky column, I think that, you know, there’s probably still some more room to go in terms of investors chasing the rally, if you want to think about it that way. But you know, that’s consistent with sort of the backdrop we’ve had for the market over the past couple of weeks, which is when you have some skepticism, when we have some caution in the market. That tends to be consistent with that so called wall of worry that you know, investors tend to climb. And that means that, you know, the market does, you know historically pretty well in that scenario.

Caleb Silver  

Yeah, the VIX has been pretty low. We know the Fear Index has been very low, except for a couple of moments when it was headline risk that really made it shoot up. But it’s been sort of a slow turning market higher to higher highs, especially since the relaxation of a lot of those tariffs in in mid April, they’re a little more smoke than fire. What are you seeing in terms of, I know you guys do such deep dives on the on the economic reports, but you also do a lot of channel checking in terms of the impact of tariffs, more smoke than fire. Lately? Have we not seen nothing yet? Well,

Kevin Gordon  

You know, there’s been some fire in in some of the more cyclical parts of the economy. I mean, you look at earnings season for the second quarter. You really did have this this huge and broad spectrum between, you know, companies that were relatively insulated from from tariffs, in terms of the direct hit to their companies, if they weren’t making products, or if they weren’t having a heavy bias towards, you know, foreign inputs, I mean, imports, then they probably weren’t hit as much. And you actually saw those companies continue to do well, not just in terms of their stock price, but in terms of actual corporate fundamentals. And some companies actually, you know, restoring guidance after having pulled it early in April when they were reporting first quarter earnings. The ones that have been more at the epicenter, you know, autos was sort of the, I think, the standout, and the poster child for it in this most recent reporting season, they definitely have been reporting taking a hit from tariff related costs and having a much stronger impact there. It’s just the tough part about analyzing this at the aggregate economic level is that those more cyclical industries and autos in particular, they’re just a smaller share of the economy.

So yes, there are ripple effects when you have manufacturing and everything factory oriented. But we also know that in the post pandemic era, those linkages have, if not broken down, they’ve just been elongated. So when you start to see a hit to that part of the economy, it’s not necessarily a hard and fast rule of, you know, X months after that, you start to see a weakening of the of the rest of the economy. We’ve been in this really interesting, what we’ve been calling, a rolling, recessionary environment, where parts of the economy, whether it’s housing, whether it’s manufacturing, consumer sentiment, housing sentiment, in general, that’s been weak and at times at recession levels, but that hasn’t filtered over to the rest of the economy. Importantly, the services economy, that’s pretty much what you’re seeing in this entire tariff dispute, not only because the tariffs are rolling in nature. So it’s still taking a while for us to figure out what some of the sectoral tariffs look like and where we ultimately end up. But mostly because the companies in the industries that are at the epicenter of the trade war, they’re not they’re not the largest share of the US economy.

Caleb Silver  

Sure, we don’t buy a car every week either. We do fill up our car with gas. And gas prices have been relatively tame, and I think that’s kind of been softening consumer prices in general, when you look at the core and also when you look at retail spending in general, if we’re not spending $75 to fill up our cars, that money goes a little bit further. Let’s go back into our portfolios for a second, because we like to ask our readers here at Investopedia, what’s your what are your top holdings? What’s in your portfolio? What are you buying? What do you? What do you? What are you continuing to buy? And what would you continue to buy if you had some more money? And it looks just like the top of the s and p5 100. You see the biggest stocks there. Nvidia, obviously dominating. It’s a $4 trillion company, but you got your big ones there, Apple, Microsoft, Palantir, they’ve been with the winners, and they like to stick with the winners, and they like to stick with the stocks that brought them to the dance. But our friends down in Malvern pa did a study that said that we are kind of overstuffed with stock. When you look inside our 401 K’s, and you look inside our defined contribution plans, we are heavily weighted in stock. When you talk about individual retail investors, 88% of our 401 K’s in stock versus 82% a decade earlier. You’re worried about over concentration of stocks, when our portfolio should be a little bit more diversified right now.

Kevin Gordon  

You know, I think that the diversification issue, you know, it certainly depends on how much you sort of want to mimic or how much you’re following the indexes. And this is an important distinction we always make for, you know, individual or retail investors versus institutional. You know, we’re much more in service of the former, you know, category, and when it comes to our clients, and we always impart the notion and the reality that, you know, looking at an index or trying to track an index, and having that same constitution of the index, that’s an institutional problem. That’s not a retail. Problem. So you don’t need to have this sort of emphasis on the Mega caps, or having a large, you know, portion of your of your portfolio necessarily being, you know, just a handful of stocks, because, you know, you were just pointing out performance this year. It’s not the case that the mega caps, at least in the case of the S&P 500are the best performers in the index this year. And actually, if you look at the group, the mag seven, those seven stocks, none of them are in the top 10 performing performers list for the S&P 500 year to date. That doesn’t mean there are bad companies or vice versa. It just means that there are other opportunities for relatively significant outperformance if you are of the more individual stock picking mindset that you can find outside of that group, S&P 500, as you know, just in general, as a benchmark, is large, larger cap in nature.

But within that sphere of large cap, it’s not just those companies that, you know, maybe, or maybe are valued more than a trillion dollars, or, you know, slightly below that, that have been doing the best. And that’s a really important distinction, I think, to the in today’s market environment. Because yes, you look at the top 10 companies in the s and p5 100, they make up 40% of the index in terms of market cap, that is a pretty significant, you know, concentration risk in terms of them turning lower and having an outsized impact on the index and vice versa. But, um, that doesn’t necessarily mean that as an individual investor, you need to mimic that. I mean, have that same setup in your portfolio. There are investors who who like that and prefer that, and that’s totally fine, but I think that, you know, understanding that they’re not the best performers, they just have the largest contribution to the index because of their weight, that’s a really important distinction, especially at a time like this, when bread still looks relatively solid to the point you know, the chart you pointed to earlier from sentiment trader, you know, breadth has been pretty solid in this run since the early April lows.

Caleb Silver  

Yeah, you gotta got, you got to have good breath if you want to have a sustained bull market. Otherwise, we know it gets a little top heavy. There’s that skew bullish skew in nicely stocks. We love that. So yeah, from sentiment trader, great stuff there. So let’s, I would love to know from your perspective, what does diversification really look like now for a retail investor. Talk about, to me, about someone in their 30s or 40s, and they want to be diversified, but they look in their portfolios, or they’re buying the large cap mutual funds or index funds through their 401(k)s or through ETFs. How do you really diversify in 2025?

Kevin Gordon  

Well, I think that you know, a lot of diversification efforts have to be centered around, what is the you know, what’s your financial risk tolerance? What’s your emotional risk tolerance? And I think that’s become a really important factor in the past couple of years, because I’ve talked to a lot of investors, particularly those who skew younger and they’re down the age spectrum, who will tell me that they’re totally fine taking a lot of risks. They don’t mind volatility, but then they’re sort of the first ones to call me or shoot me a note when we have a 5% pullback in the market, and they, you know, start to feel a lot more tremors. And you know, to that, I answer you probably, you know, for anybody that has that kind of feeling, not, you know, it’s not any targeted advice towards one individual, but if that, if you find yourself in that position, you probably should assess your you know the difference between the two your financial risk tolerance and your emotional risk tolerance. I think that’s an important distinction beyond that, though, and sort of, I would say, somewhat related. And this is something that’s changed, you know, you know this well, something that’s changed in the post pandemic environment. You know, the bond market as a diversification tool has become, I think, much more additive for for the average investors portfolio.

You know, pre pandemic, that post financial crisis, run expansion up until the pandemic. You know, bond yields were pinned very low, not just in the US, but around the world. Now that we’ve got some inflation heat again, yes, that is, there’s, there’s downside to that in terms of the economy. We all learned that from 2022 into 23 but now with yields having, you know, are, you know, having been elevated for a couple of years now, and the fact that you’re getting a much stronger coupon on the side of the in the bond market. That’s a pretty strong, you know, balance for a portfolio. And you know, for all the consternation around global risks and global growth risks this year, it’s actually international developed bonds that have had the strongest returns in the fixed income universe year to date. So there are a lot more opportunities outside of the stock market, which is where, you know, I live and what I cover. But when I talk to my colleagues on the fixed income team, you know, we’re still really sort of pounding the table and emphasizing the benefits and the diversification benefits you get from inching out into the bond market. So I think particularly for younger investors who you know, maybe only know the stock market because it’s what is, you know, maybe a little bit more popular, or just more widely known because of some of the runs that, you know, meme stocks are kind of these more crypto adjacent stocks have had over the past couple of years, I would say, you know, take as much time, if not more, to understand what’s going on in fixed income and how there are more beneficial opportunities there, especially when it comes to diversification, because it really comes in handy. You know, when correlations go the other way, when you do go into a sell off, and you have that cushion from bonds that helps soften the blow. Sometimes, when you go through these pretty significant drawdowns, like we’ve had in mega cap tech and you know, some of the more speculative, riskier parts of the stock market.

Caleb Silver  

Yeah, well, you mentioned international bonds, international stocks doing pretty well too, the best performing markets in the world, not here in the United States, a bunch of them will. Over in Europe, and many of them might surprise you. Surprise at the end of this show for folks tuning in, shout out to our viewers in Tanzania and Mexico and all over the world who are chiming and there you go. Chevy’s in the in the house. If you can tell me at the end of the show, KW, the best performing stock market in the world, the best performing ETF in the world. I’ll send you a pair of Investopedia socks. So join that conversation. A little surprise there at the end of the show. Let’s talk about long term expectations. Kevin, you guys do such a good job at Schwab research about tempering expectations, but also giving us a realistic view of what we should expect as investors, especially in the US equity market, we’ve come through a period of 14% annual returns, even higher when you look at it over the past three or four years, the returns are getting bigger. Should we expect that going forward, though, given the world we’re living in today and how things are changing?

Kevin Gordon  

Yeah, you know, any long term expectations model or data set you’ll look at that’s put together right now. You know, it won’t have as strong of expectations. Looking forward, whether that’s the next five or 10 years, most of that is based on valuation. You look at where valuations are today, whether it’s the S&P 500, especially something like the NASDAQ, you know, a lot of that mega cap growth, you know, tech, tech related exposure, and the fact that that’s just a growing share of the market. I mean, because those companies tend to have much, you know, higher and stretched, more stretched valuations, you know, they’re the ones that tend to have sort of the weightiness aspect of putting downward pressure on expected returns. Looking ahead, of course, you can back up the past 10 years when a lot of those companies or industries and parts of the stock market were, still relatively overvalued, but of course, 10 years later, we’re sitting on some pretty nice gains, even with a lot of chop along the way. So I wouldn’t necessarily take that as gospel, in some sort of hard and fast rule that we’re not going to have strong returns moving forward, but to the point we were just talking about around diversification, I think it makes a stronger argument for having a more balanced and more diversified portfolio, especially because, you know, tech and tech adjacent is such a large share of the stock market today.

You can argue, depending on what industry you’re putting in there, into that mix, you know, you can argue it’s more, it’s more than half the market, you know, depending on where you are in the cycle. So I think that’s an important thing to keep in mind, especially because when you look at household exposure to stocks, or just assets in general, it’s we’re pretty much at an all time high, and we’ve got data from the Fed that goes back to the 1950s on this. You can map that with rolling returns for the S&P 500 over the past 10 years. And you can do that lagged effect, where you can see that anytime the market gets this overvalued, or anytime you see household asset or equity exposure get this high forward returns in the next 10 years tend to be pretty weak. Again, not a hard and fast rule, not one relationship that rules them all in terms of what we have to expect for longer term expectations. But I think it’s another reason to explore more opportunity, not just within the stock market, but also, again, within areas like fixed income or other asset classes. So it’s an important thing to keep in mind. But I will say, even though tech and those parts of the market have grown their shares significantly and are essentially at an all time high right now in terms of their makeup of the S&P that’s also as the economy has transitioned from being more manufacturing based decades ago and more cyclical based to more services and software and innovation based so it’s not like that’s been an unjustified move, but you can get to points where sometimes the gap is a little wide, where performance or price runs up a little bit faster than what fundamentals suggest.

Caleb Silver  

Yeah, let’s go out on this final chart. We ask our readers, where do you think the bubbles are in the market right now, if any? And of course, they think those bubbles are in mega cap tech, they think they’re in crypto, they think they’re in AI related stocks. This has been the way they felt for a very long time. And housing, they thought was in a bubble forever, because housing prices have just gone nothing but higher here. So the fact that we think, as individual investors, and we all believe, a lot of these assets are overpriced. A lot of these are in bubble territory, getting pretty frothy. When you ask our when we asked our readers, what stocks would you buy and hold now for the next 10 years, they are right in these sectors. They’re crypto-adjacent. They’re AI related stocks and their mega cap tech stocks. So even though we might think things are expensive, it doesn’t stop us from continuing to buy the same thing. Your reaction to that,

Kevin Gordon  

You know, it’s sort of a perfect illustration of how we view valuation. You know, we get asked a lot about valuation. What does it mean, you know, for forward performance, what do you think the market will do because of x, you know, multiple being this high, you know, for the first thing I would say is valuation is a terrible market timing tool, if such a thing exists. I mean, no, there is no good market timing tool. Otherwise, you know, we wouldn’t be having this, this conversation. But you know, valuation for us is more this tool to look at investor sentiment and how optimistic investors are, or how pessimistic they are. And when you you talk about, you know, some of these areas of the market, whether it’s tech, whether it’s crypto, you know, having done one. L for quite a while, you know, quite a few years now, in terms of percentage gains, but also being towards the top of the list. When people say, you know, we feel this is overvalued. Can’t go on much longer, that’s sort of the exact illustration we’re trying to paint with valuation, which is just that when multiples get stretched, when valuations get really high and really optimistic, just tells us that investors are willing to pay a lot for stocks. Are willing to pay a lot for an asset class that can last for a really long time.

We had that for a good chunk of the latter half of 2020 into all of 2021 until it ultimately became a problem at the beginning of 2022 similar aspect kind of reemerged in 23 to 24 and then, of course, we had, you know, a pretty significant drawdown earlier this year. You could date it back to, you know, the late 1990s you know, that run from 98 up until, you know, to the beginning of 2000 so it’s not necessarily that, you know, there’s a hard and fast we’ve got two years until, you know, multiples finally start to break and everything starts to crumble. It’s really just sort of indicative of the market environment, of the investing environment, becoming a little bit more vulnerable to shocks. So I would argue we’re getting closer to the point I made about sentiment earlier. We’re getting closer to that, I think, point where we can view it more as a risk, where the ground’s a little bit shakier. But it really just tells us when valuations are this stretched and people still are sending flows into these areas of the market, still tells us that they’re willing to pay relatively high prices, but we would, we would sort of be on guard for or, you know, on watch for some sort of a negative catalyst that can emerge, whether it’s labor market related, whether it’s, you know, now tariff or policy related, because that tends to tip, you know, the market in the opposite direction. And, you know, sometimes pretty swiftly when you get to these levels.

Caleb Silver  

Cool. Last thing, make it quick with you, and we appreciate the time. What is the one indicator or one thing you don’t think people are paying enough attention to as it relates to to the performance of the markets and what we might expect for the next several months?

Kevin Gordon  

I would say, because of all the consternation around the non farm payrolls report and the revisions over the past few months, I think initial jobless claims have been probably the best key to look at in real time in terms of what firing activity looks like. There’s a pretty strong correlation with the S&P or credit spreads and claims staying relatively low. I think if that’s still the environment for weekly claims remaining low, probably going to be still supportive of the equity market.

Caleb Silver 

Great stuff. Kevin Gordon, the Senior Investment Strategist with Charles Schwab, love the research you and your team do. Folks follow them. Follow their blogs. Follow them across the socials. Thanks so much for joining the Express.

Kevin Gordon  

Thanks. Caleb, appreciate it.

Caleb Silver  

All right, let’s get to a little bit of money in motion, because if you haven’t been paying attention lately, the IPO market. Don’t call it a comeback. It’s been here for years, but it’s really come back strongly this year. We hadn’t had an IPO in a very long time. Let’s hit a little bit of money in motion.

Don’t call it a comeback, but it kind of is a comeback when you look at the IPO market right now, we’ve had an extremely strong year so far, and we’re only in mid August lately. But if you haven’t been paying attention, we’ve had some IPOs here that have had some staying power. Here, just to look at these, some of these some of these stats the first half of 2020, 565, IPOs. That’s a 76% increase compared to just 94 IPOs in the first half of 2024. We had a bull market last year. We didn’t have a lot of companies going public, but right now, the they are ready to go the second quarter. So far this year, 50 IPOs, a 16% increase over the second quarter of last year for the full year. We’re expecting over 300 companies to go public in 2025 with about 180 listings in New York alone. They love those listings down at the New York Stock Exchange and at the NASDAQ. But when you look at some of the companies and some of the performance we are seeing, these gains are sticking around right now. And hey, we’ve seen this before. We saw it in 1995 with Netscape, with followed by AOL, followed by Yahoo, followed by all the internet dot bombs. But these companies, these gains, are sticking around, and that’s a pretty good sign that investors are willing to take on some risk. We’ll see what happens when a lot of these IPOs hit their lock up period, because we know things can change very quickly, but right now, IPO market is strong and getting stronger, and that’s probably a pretty good sign for the sustainability of this little bull market. It’s getting kind of old in months and years. All right, let’s get set up for a busy week ahead, especially out west, if you’re in Jackson Hole Wyoming, let’s get in to some of the things we’re expecting this week. You got more earnings coming our way. And as Kevin said, and as we’ve been talking about, we’ve been getting pretty strong earnings from a lot of companies in the S&P 500 100, and if you miss, you’re getting punished. But let’s get set up for the week ahead.

All right, we got earnings today from. Couple companies, including blink networks, earnings, retail earnings. Big week for retail earnings, with Home Depot and Walmart reporting results this week. Medtronic, I should say not Walmart. On Wednesday, we’re going to get the FOMC minutes plus lows is reporting results and target more retail earnings heading our way. We’ll see if, we’ll see if tariffs are starting to bleed into their prices, and if they expect to charge us more. And then Thursday and Friday, the Fed’s Jackson Hole symposium. This title of this gathering up in the Grand Tetons is labor markets in transition. That should be a fascinating conversation. I’ve been to the Jackson Hole Fed meeting before, and it is what you think it is. A lot of economists in zip up fleece vests, but button ups underneath, talking econ, talking policy, talking labor markets, but then doing a little fly fishing and canoeing after the after the meetings conclude. Fed Chair Powell will deliver remarks on Friday. A lot of people expecting him to tip his hat, potentially a little bit in terms of what to expect from the Fed’s next meeting, coming up in the middle of September, but I wouldn’t expect that from Fed Chair Polly places cards pretty close to his vest, and we know there’s a lot of pressure on him, so Thursday and Friday, keep all eyes on Jackson Hole and the Fed’s symposium up there. All right, let’s get to our indicator of the week, and it’s all about credit spreads. Kevin mentioned it when we were talking about it, and we haven’t seen spreads. Credit spreads blow out. In other words, we have not seen the difference between the yield between a treasury security, which is considered a risk free asset, and a corporate bond of the same maturity. Good chart here from Grant over at The Daily number, looking at the B of A US high yield option, adjusted spread and the Fed financial stress index, both measuring credit spreads to a different degree. And if you see credit spreads start to widen, if you see this big difference between the yield between a treasury and a corporate bond, then, you know, things are getting a lot riskier out there, and that’s usually one of the signs we look for when we start to get a little shaky, on shaky ground in the stock market right now, but right now, both the Fed financial stress index and the B of a high yield option adjusted spread index are sitting near their lows, and that’s probably another good sign for stocks. Anything can happen, and a lot of things could change, but keep an eye on credit spreads. And if you want to learn more, Investopedia has got everything you need to know about credit spreads, and our news team will be all over those earnings we mentioned earlier. Big shout out to all the folks joining us from all over the world. We have folks dropping in from Canada. Yeah, this is live on YouTube as well. Call me Vince, live and direct right now on YouTube and then on demand wherever you get your podcast.

Shout out to our viewers and our listeners in Canada. Good morning from Auckland, New Zealand. Robert, nice for you to drop in. Is it really morning over there? Sacramento’s in the house. I am Ron one back in the house. We appreciate you joining in India’s in the house. The Misfit, a regular on the show right now. X man’s 70 from UK. Good afternoon to you. The trend is your friend. Max. Do the trends always your friend until things change, and that’s why you got to pay attention. That’s why you got to watch your Investopedia express to see when trends are changing. What about gold and silver? Gino, hey, gold kind of dancing near record highs right now. I talked about the best performing assets right now in the market, across capital markets, it’s Bitcoin and it’s gold, and that should tell you where people are in terms of their risk profile. Riskier folks like that Bitcoin, more conservative folks, they’ve been buying gold like central banks. What about lithium refining industry? Yeah, we’re going to need a lot more lithium…

And you see what these rare earth conversations are all about between the US and China and other countries. Lithium very big in South America, that is part of the equation. We’re going to need a lot more lithium if we’re going to create a lot more electronics and AI empowered devices. Houston, Texas is in the house. Fernando, welcome, New York is in the house. Jay Fonzarelli, hey, Texas is in the house. Ryan, thanks for dropping in. Appreciate I appreciate all you guys dropping in Denver, Colorado’s in the house. What’s up? 303, love it up there. Puerto Rico’s in the house. Buenos dias, Puerto Rico. We love you down there in Puerto Rico. Thanks to all of you for chiming in love to hear from our viewers and our listeners from all over the world, the Investopedia Express live every Monday at 10 o’clock Eastern time on all social platforms, streaming wherever you get them, and then on demand on your favorite podcast platforms, keep chiming in. Keep sending us your comments. We love hearing from you. Big thanks to Kevin Gordon of Schwab for dropping in and dropping some knowledge on us, and we will talk again a little further on down the line.