Depressed Day Traders (EP. 477)

**Ben Carlson** (0:04)
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Welcome to Animal Spirits with Michael and Ben. Michael, how many new all-time highs has the S&P 500 hit since 1950?
What's your guess? Ballpark it.

**Michael Batnick** (0:54)
1,468.

**Ben Carlson** (0:57)
It's like 1,379. You're pretty close.

**Michael Batnick** (1:01)
Holy shit.

**Ben Carlson** (1:02)
Did you just pull that out of your ass?

**Michael Batnick** (1:04)
Not bad. I'm very proud of myself.

**Ben Carlson** (1:05)
More or less? Okay. So I think that's like 7% of all trading days. Say this because last week we hit all-time highs again. You and I talked about this a little bit. Some charts from Exhibit A here that show when this happens.
26 new all-time highs so far this year. The average since 1990 is about 21 So we're a little ahead of schedule here. But the average is obviously skewed and varied. In the good years, there's a lot of them. Because there's been plenty of years where there wasn't any. Look at those, look at that 2000 to 2012 range. A lot of zeros, a lot of nothing. So you have to take this when you can in the good times.
I think that this many all-time highs, given all of the headlines, would have surprised a lot of people. War in Iran, higher gas prices, all the stuff people are worried about, right? And the stock market continues to move higher.
Is it all AI still? Is this the thing that just AI trumps everything? It doesn't matter what the headlines throw at us, it's all determined by AI.

**Michael Batnick** (2:06)
Ben, you're right. AI is the only thing that matters. We've spoken recently about how this market is Teflon. It started with the global pandemic. And once in a hundred-year storm of inflation. And then we had the Fed jacking up interest rates.
The housing market is frozen.
Silicon Valley Bank went under. Tariffs. Liberation Day. Two wars. Two wars.

**Ben Carlson** (2:38)
Remember the Yen carry trade on wine? That was a thing for like a day.

**Michael Batnick** (2:41)
Yeah, whatever. Who cares? But yeah, so it's one thing after another.

**Ben Carlson** (2:44)
Evergrande in China. Remember that one? We had to worry about that. Pretend to care about that.

**Michael Batnick** (2:48)
Evergrande in China. It's one thing after the other.

**Ben Carlson** (2:50)
Commercial real estate crisis was going to happen. There was going to be a commercial real estate crisis because everyone worked remotely.

**Michael Batnick** (2:54)
Private credit crash.

**Ben Carlson** (2:56)
Yep, private credit. Stacked inflation fears.

**Michael Batnick** (3:00)
The reason why none of this has mattered, really and truly, I do believe it's the AI trade. I mean, I don't think I'm going on a limb there. So look at this chart.
Well, actually, you know what? The consumer part of it is also a big part of the story. The fact that the consumer has been able to be resilient through all of this is remarkable. But through the lens of the stock market, what matters obviously is the AI trade and the continued expansion of CapEx numbers. This is wild. Look at this chart from Hyperscale Farmer.
Bloomer Consensus on a rolling basis now surpassed $3 trillion. We're looking at the three-year sum on a rolling 12-month forward basis for Amazon, Google, Meta, Oracle, and Microsoft. In December 2020, when this thing started, it was at $500 billion and it's gone up and up and up and up. Now it's going vertical and we're looking at $3 trillion over the next three years, I suppose. Is that what we're looking at here?

**Ben Carlson** (4:02)
That's amazing. I think one of these things, these companies don't get enough credit for is the fact that for years it was kind of like all these companies are too short term in nature and they just care about share buybacks and now look at these companies are investing everything they have essentially back into long term projects.
These things are not really paying out yet and I think they deserve credit for saying all right, fine, we're going to think and act for the long term. And people still hate it because people hate data centers and we'll get into that later. But this is this is just there's never been anything like this before where the biggest companies just said, all right, we're changing everything. We're getting rid of all of our money. Take it. See you later.