Why the stock market is still the best place to be: strategist

The stock market has been on autopilot in November, and it’s not without rhyme or reason, said Rick Rieder, BlackRock’s global interest rate CIO.

“I do not think the valuation of stocks is that high when looking at free cash flow dividends,” Rieder said on Yahoo Finance Live. “And in the last few weeks, some revenue is pretty impressive.”

The market has liked that companies have been able to pass on inflation successfully to end users, as seen this week in earnings from big names like Walmart, Target and TJX Companies, Rieder added.

To that point, the figures from the third quarter earnings season continue to develop very positively despite supply chain bottlenecks and hot inflation.

About 82% of S&P 500 companies reported a positive third-quarter earnings surprise, according to FactSet data. The growth rate for mixed earnings for the third quarter tracks 39.6%, which is set to be the fastest expanding pace for S&P 500 companies since the second quarter of 2020.

As a result of favorable earnings trends, equities have moved even higher.

The S&P 500 closed at a record high for the 66th time this year on Thursday. Strong risk appetite for equities has sent investors devouring busy startups (despite losing money) in the hopes of making quick money, especially newly struck stock exchanges Sweetgreen and Rivian.

Meanwhile, major technology companies, Apple, Microsoft and Google, set new records on Friday.

If consumers could continue to shake off inflation, the market is ready to march forward, professionals say.

“No doubt there is inflation. Yes, the prices of things are rising. But you know how long the market will keep shaking it off? I think the market will keep shaking it off as long as consumers continue to buy everything. this, “said TKer founder and editor Sam Ro on Yahoo Finance Live. “I think it’s the lesson from the retail sales report, something from Walmart earnings, from Target earnings, from TJX earnings. Even though retailers are raising prices, consumers are going shopping and still buying these things.”

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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