Wall Street veteran warns that markets are ‘over their skis.’
Transcript:
CONWAY GITTENS: So can you describe the market environment that we are in right now, and how does it compare to Trump 1.0?
BOB LANG: Well, the market environment right now, I can’t tell you anything but being bullish right now. I mean, every single drop that we’ve had for the past few weeks, certainly since the beginning of 2025, has been bought by the dip buyers. And that is a great characteristic of a bull market. And, and and frankly, until that changes, you have to believe that the market is going to continue to make higher highs and higher lows, which is our textbook technical definition of an uptrend. So I think that, you know bullish until further notice. And here we are. We’re up almost almost 1% today here on Monday. And I think as the as the markets reach for that all time high on the S&P 500 which is about 6100. We’re almost there. Once we reach that level, it’s going to be a decision point to see whether we can take the markets up even higher. But by and large, I mean, this market has been very broad in terms of, of of ranges for stocks to be moving up. And we’re seeing broad participation, not just in the technology areas, the Mag Seven that if you will, but also in financials, in industrials and in consumer related stocks and stocks that you wouldn’t think that were going to be driving the markets at this point in time of the year. But they are but they’re doing it.
CONWAY GITTENS: And I’m wondering, you know, we had double digit growth, not just double digit, but like 20% plus growth in the S&P 500 for like the past two years. What are you thinking is going to happen in 2025 when you have such strength?
BOB LANG: Yeah, I think the markets are pretty much over their skis right now. And I don’t see those big returns happening again for 2025. Certainly there isn’t a precedent for that. And maybe high single digits to low double digit returns would be fantastic, especially in this environment where the Fed is easing up on the up on the gas pedal when it comes to interest rates. I think that that is really an important point there with with earnings and with the Fed and with interest rates. And if all of these are all in alignment, going in the right direction, you could certainly have a, you know, certainly make a call for stronger markets in 2025. I just don’t see it happening up to 20 to 25% again, that is going to put the multiple at a very, very high level, probably about 23, 24 times earnings. And as we know, if you go back 25 years, back to 1999 to 2000, we had a multiple of about 25, 26 times earnings. And you know, we know the market crashed right after that.
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