Monday Takeaways: Stocks at Record Highs – What’s Next?

Shah Gilani|August 18, 2025

The S&P 500, Nasdaq Composite, and Nasdaq 100 all notched fresh record highs last week… yet Wall Street is split.

Are stocks “too good to be true” – or is the rally just getting started?

In this week’s Monday Takeaways, I break down:

• Why I still see strength in the market despite stretched valuations
• The key earnings trend analysts are suddenly scrambling to catch up to
• How government-backed investments could spark the next wave of winners
• The retail earnings to watch this week that could confirm consumer strength
• And how the meeting in Jackson Hole could shake markets on Friday

I also reveal why even a 10% drop could be a buying opportunity and how to position yourself before it happens.

Click on the image below to see why a small pull back could be a big opportunity.

Transcript

Hey, everybody. Shah Gilani here with your Monday Takeaways.

First off, look back last week briefly.

We had another record day for the S&P 500 last week. So saw, yes, again, another record high. Same thing with the Nasdaq Composite. Same thing with the Nasdaq 100. Things are just cooking. The problem is people are getting even more worried that things are going to tumble because they are just too good, price to perfection, valuation stretched, etc., etc.

The takeaway from that is likely to go higher because that’s been the mantra since the April tumble.

A lot of people have missed the rally back up to new highs again and again and again and increasingly think that valuations are getting stretched and that the economy is maybe going to slow and certainly looks like maybe the labor market is softening. But if that’s the case, then the Fed will likely cut, and that should be something of a boost to markets.

Because unless the economy falls out of bed, unless unemployment rises precipitously, there’s really not a lot of headwinds from the economy impacting the market.

So I see strength there, and I see tons of sideline money and performance chasing still to happen. So I’m looking at the market as having pretty good strength. Now there are always black swans out there that we can’t see. There are always issues that the markets could have. But any in my opinion, any sell off, if we get a five percent sell off, that would be a little scary for some people to be like, I told you. It looks too good. But if something happened and that triggered stops, let’s say, and markets fall ten percent, that’s just an absolute buying opportunity.

One of the reasons is a pretty cool takeaway from, a Citigroup index last week tells us that analysts are ratcheting up their estimates for earnings going forward at the fastest pace in four years.

Now they had been knocking earnings estimates down all year, really going up into just about the end of the second calendar quarter.

Not reporting period, but towards the end of this, they were just knocking down estimates, and then the earnings estimates have been excellent, and the actual results have been even better. So they started to raise them as companies started to report. And then earnings actual earnings beat a lot of those slightly raised estimates, but the bar had been lower. But now analysts are scrambling to raise estimates for future earnings.

That, people, is a positive takeaway for the markets and says to all of us, if there is any dip, consider ourselves lucky to be able to buy some great companies on sale if we get that opportunity, which inevitably, invariably, at some time, we will. But if you wait for that moment, it may be months ahead, quarters ahead, could be today. But there’s not a lot that’s pushing down on the market. Geopolitics, well, the president, Trump and Zelenskyy are supposed to meet this week, today with European leaders to discuss what President Trump and Putin talked about in Anchorage.

Are we going to see a ceasefire in Ukraine?

Unlikely. If we do and if we do see some positive efforts towards peace, then, yes, I think markets can rally even a little bit more. But that’s not even that’s the big political thing right now and it’s not even moving market. Markets are brushing it off as if doesn’t really mean anything. It’s more about earnings. So, again, takeaway is everything looks pretty positive in my book and is things are acting positively. And you’re getting these little bumps like Intel.

President Trump talking about wanting to the government to take a stake in Intel using money from the CHIPS Act.

This is not unusual coming from this president because he’s already ordered the defense department to take a position in MP materials. There are other companies out there that he’s likely to want the government to take some kind of position in the interest of national interest. So, that’s going to be a positive because people are going to be wondering and speculating on what’s the next company industry that the President is going to support. So a lot of positives out there, not a lot of negatives.

It’s a pretty good all around day. The only thing I think we have to keep a really good eye on this week, everybody, is earnings. You got retail earnings coming up. You got Home Depot, Lowe’s, Walmart, Target, TJX.

So it’s important to see what they say as far as revenues, of course, earnings, but I think more importantly, traffic and inventory are going to be important. And if they look positive and the numbers are good and they guide positively, then it looks like retail is maybe in a good position, and spending likely will continue. That’s supportive. So everyone’s going to be keeping an eye on retail earnings numbers this week, and we should too.

And last but not least, Friday, we have the big powwow with Jackson Hole, the Fed’s annual symposium, and Chairman Powell gives the keynote speech on Friday. I think all ears will be up for that. See what he has to say about the economy, what he has to say about interest rates, what he has to say about the trajectory of tariff inflation. Maybe he changes his tune, to say it’s likely perhaps less transitory than they originally thought, which would be an embarrassment.

But markets wouldn’t like that because that means we were wrong again. We might have to keep rates, elevated for longer. So all eyes will be on Chairman Powell’s keynote speech on Friday. That’s it for your Monday Takeaways.

Go get yourself some stocks out there. If you’re nervous people, put a tight stop under it. You gotta be in the game. You gotta be in it to win it. Cheers, everybody.