9-28-26 Can the S&P 500 Really Reach 9,000?
The discussion weighs geopolitical uncertainty, stronger capital-goods spending, and consumer resilience against the Federal Reserve's limited ability to control oil prices and investment-driven inflation. Market conditions remain uneven, with technology overbought, utilities and real estate oversold, and quarter-end rebalancing adding pressure. The S&P 500 could reach 9,000 under a favorable earnings and valuation scenario, but slower 2027 earnings growth and higher rates create meaningful downside risks.
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The administration is holding firm that any Iran agreement must address nuclear development, and the resulting uncertainty is pushing oil prices higher. Higher oil is feeding into Treasury yields and adding pressure to stocks, while the host says renewed bombing could follow if negotiations fail.
The 1.6% August increase in non-defense capital goods orders excluding aircraft is being linked to stronger manufacturing, business investment, earnings, and capex-related inflation. The host argues that this growth can help keep stocks near all-time highs even as higher rates weigh on valuations.
Consumers are sustaining spending by drawing on accumulated financial assets, including rising 401(k) withdrawals and IRA distributions, while an unusually large cash and investment cushion delays the effect of weaker consumption on inflation. The host says that cushion could eventually end if oil prices, interest rates, and inflation remain elevated, but the timing could range from six months to a year.
The host characterizes current inflation as driven by rising wages, employment, and economic activity rather than the policy-created price spikes and shutdowns he associates with the 1970s. Because the Federal Reserve cannot directly control oil prices, economic development, or capex, he says it mainly attempts to reduce demand through higher interest rates.
GEO-POLITICS
“So, oil prices are up this morning. That's weighing It's also weighing on on yields and u stock futures because of this…”—
ECONOMY
“They are all very polite, very well spoken, very well put together, generally optimistic about their future, very ingrained into what they're doing…”—
“This is non-defense x aircraft. This kind of strips out all the government spending but that was extremely strong. So in August that was up 1.6%…”—
“Well, interest rates have normalized but interest rates are going up because the economy is strengthening. And when the economy strengthens, I'm going to get more inflation…”—
MARKETS
“This morning, futures are pointing down decently. Nasdaq's going to be down about 1%. S&P is going to be about a half a percent…”—
“And we're very very breath is very very weak right now in the markets. Now also positioning is also very weak…”—
“This is the this is the iShares technology sector that's sitting at all-time highs. And we talked a little bit about this last week.”—
FORECASTS
“That dispersion doesn't last. For whatever reason, there's going to be a rotation in the markets and we will likely see we'll likely see oil prices decline…”—
“Jeff put out a 9,000 price target for the S&P for next year. 9,000. We're at 7300 right now. 7,400 on the index, wherever we are this morning. Okay…”—
“And in 2027, as we get into there, there's a quirk in the estimates, which is earnings growth is going to slow in 2027 from the growth rate that we…”—
INTRO
The host previews quarter-end volatility, with technology overbought, utilities and real estate oversold, and historical October strength offering potential relief after near-term weakness.
End of Quarter Prep
Quarter-end fund positioning may produce sloppy equity trading as managers reduce overweight exposure, while technology-led selling pressures futures and encourages sector rotation.
October tends to be strong in mid-term election years
October has historically been strong during midterm election years, although the host cautions that seasonal averages are not guarantees and should not dictate market exits.
If you're starting to feel bearish...Markets are sitting near all-time highs
Despite weak breadth, record cash allocations, and bearish sentiment, markets remain near all-time highs; the host warns that emotional selling can create poor investment decisions.
Baylor Fathers' Weekend, Hope for the Future, and Coffee Coming...
The host recounts Baylor Fathers’ Weekend and says meeting optimistic, polite, capable college students challenged social-media-driven pessimism about younger generations and the country’s future.
Iran Conflict continues; oil prices remain elevated
Continuing tensions between the United States and Iran keep oil prices elevated, lifting yields and pressuring stock futures as negotiations remain tied to Iran’s nuclear program.
Economic numbers continue strong (charts) despite higher interest rates
Strong capital-goods orders, manufacturing activity, and corporate investment are supporting economic growth and earnings even as higher rates and inflation create persistent market concerns.
Michigan Consumer Sentiment Index (chart)
Michigan consumer sentiment remains depressed by inflation, elevated costs, tariffs, and geopolitical fears, with survey-method changes explaining part of the apparent deterioration.
We're not Recessionary yet - Disinflationary action is coming
Negative sentiment does not yet signal recession because markets and economic activity remain resilient, although consumers are increasingly using savings and investment accounts to maintain spending.
When does consumer cushion run out?
Consumers still have substantial financial cushions, but persistent oil prices, inflation, and interest rates will eventually exhaust those reserves and force demand to weaken.
Positive effects of Cap-ex spending
Business capital expenditure is supporting payrolls, salaries, construction, and regional development, extending economic activity even while consumer finances face growing pressure.
Effects of Cap spending (Why not everyone wants a WalMart...)
Investment around data centers, distribution centers, and other major projects creates secondary development, but towns such as Lago Vista may resist retailers to preserve local character.
Can the S&P Really Reach 9,000?
The host argues that investment-driven inflation can reflect healthy economic expansion, unlike inflation caused by stimulus checks and shutdowns, though the Federal Reserve cannot directly control oil or capex.
Estimates Usually Fall
A favorable earnings and valuation scenario could lift the S&P 500 to 9,000, but achieving that target requires substantial earnings growth and multiple expansion.
Earnings are Breaking Above 90-year Ceiling, and rising...
Wall Street estimates usually decline as reality approaches, yet 2026–2027 forecasts are rising because capital spending is boosting expected earnings rather than producing the typical downward revisions.
The Earnings Path has a Hole in it
Earnings projections are already above long-term historical ceilings, making 9,000 possible but dependent on unusually strong results and market valuations extending beyond established trend lines.
Not one Fed Official Sees a Downside to Growth
The bullish outlook contains a significant hole: earnings growth is expected to slow during 2027, while optimistic forecasts from analysts and Federal Reserve officials leave little room for disappointment.
What Has to Happen Next
Higher interest rates could reduce discounted earnings values and compress valuation multiples; the host concludes that repricing risk, rather than the headline target itself, deserves close attention.
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Important Disclaimers
Not Investment Advice: For education only — not financial, tax or legal advice.
AI-Generated: Made by AI from source transcripts and may contain errors.
No Guarantees: Past performance does not predict future results; investing carries risk.
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