FAST FIVE: Goldman: We "Don't Love Risk/Reward Up Here… Starting To Worry About Valuation"

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They are both driving very fast in the same lane.  Yes, I'm concerned about how this story ends — but, note the following chart, a simple overlay of the Fed's balance sheet and NDX.  We started the year at $4.22 tr.  GIR expects to end the year at $7.75tr and to end 2021 at .

where are we in the retail cycle?  Having lived through the late 90's, I tend to think the recent euphoria can persist a bit longer.

But, I do think this illustrates a stark disjunction between one segment of the professional trading community and one segment of the retail trading community: 3.

sales & trading colleague Brian Friedman and I have a long-standing debate about how much of the post-crisis equity rally has been driven by the multiple (as influenced by lower real rates) and how much has been more “genuine.”  I think this graph allows us both to claim victory.  yes, P/E expansion has been the single largest factor in the rally; that said, P/E expansion accounts for less than half of the total rally: ii.

You've seen this before, and it continues to speak for itself: 6.

Categories: ZH