Yesterday's session on Wall Street seems to have brought new records in the quotations of the main indices there. Neither the 5% inflation, nor the possibility of tapering, nor supply problems, rising costs or valuations discourage bulls from buying shares of American companies.
The Dow Jones and S&P 500 indexes on Monday closed at record levels during the regular session. The former overcame the level of 35750 points, and the latter 4570 points.
Tesla in the spotlight
The number one topic on the American stock market seemed to be Tesla, whose share prices rose by more than 12 percent and market capitalization exceeded $1 trillion. The personal wealth of Elon Musk, the world's richest man according to the Bloomberg ranking, exceeded $280 billion.
The positive news seems to be two for Elon Musk's company. One is the problems with deliveries of traditional cars to Europe by shortages of components for them. That made the Tesla Model 3 the best-selling car in Europe. The car rental company Hertz has announced that it will order by 2022. 100,000 teslas. Hertz's CEO stated that electric cars are entering the mainstream and will occupy an increasing share of the market.
More results on Wall Street ahead
Today, investors are awaiting more earnings releases from large companies. On Tuesday, third quarter results will be released by: Alphabet, Microsoft, 3M, UPS, Visa, Twitter, Advanced Micro Devices or Robinhood. Of the 117 companies in the S&P 500 index that have reported so far, 84 percent beat market forecasts, according to Refinitiv.
Current valuations of U.S. indices
According to the Wall Street Journal, the price-to-earnings ratio for the Dow Jones Industrial Average index is 23.07 as of Oct. 22, with a value of 26.29 a year ago, and the forward P/E is 18.93. For the S&P 500, this popular valuation ratio as of Oct. 22 is 30.45 with a value of 38.25 a year ago, and the forward P/E is 22.17.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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