From FODA To FOMO

During the first half of this year, investors were driven by fear of delusional analysts (FODA). They believed that the analysts were much too optimistic about earnings. Now that the analysts are finally shaving their earnings estimates, FOMO (fear of missing out) is driving investors into a bullish frenzy.

The S&P 500 is up 13.3% since it bottomed at 3666 on June 16. One week after it bottomed, S&P 500 forward earnings peaked at a record high. It's been edging down since then as industry analysts have turned more cautious on the earnings outlook for 2022 and 2023.