Will The Dow Hit 100k? Absolutely. I Just Don’t Know When.

This week I had a great conversation about why I remain cautiously bullish.

There is always a measurable about of trepidation and concern when the stock market is doing well… Will it last? How will it end? And for those of you who remember 1993-1994, the Tech Bubble of 2000 and the housing crisis of 2008, the scars of those massive recessions are still there.

When we look at today’s markets and economy, we are facing something somewhat different… the market is rising despite the Fed standing on the brake pedal. Why is this?

It is always important to remember that the stock market is a leading indicator of the economy. The market thinks the current inflation headwind will die down and allow the Fed to ease off their policy. The market is rising on this assumption.

But if you look even further, what truly drives economic growth is earnings. And corporate America is strong right now. With Q1 earnings wrapping up, we had results that were much better than expected… especially compared to what some people feared.

There is no doubt there are headwinds in our economy: Inflation is still above the Fed’s target. The national debt is reaching unsustainable levels. Social Security is seriously underfunded and the reserve account will run out in less than 10 years. Commercial real estate is struggling. Mortgage rates are above 7%. There is uncertainty regarding the election and the expiring tax policy that will raise taxes starting in 2026.

But there are strong tailwinds to consider as well: Corporate America is healthy. Residential Real Estate is stable. Artificial Intelligence is transforming our world. Unemployment is very low. But the most important factor to me is the Fed: should the economy stumble, the Fed is ready and able to cut rates. They have reloaded their ammunition.

When I started my career (April 1, 2000… 4 days before the peak of the tech bubble!), the first lesson I learned was DON’T FIGHT THE FED. This was apparent in 2022 for bond investors. And it is apparent now as the Fed wants the economy to continue to grow.

Will the Dow hit 100k? Absolutely. I just don’t know when.

Could we see a -10% pullback? Absolutely. But I don’t see it as a catalyst to -40%.