38 All-Time Highs in 2025

Key Concepts

• All-Time Highs (ATHs): Record peaks reached by the S&P 500 index.
• Liquidity Cycle: The ebb and flow of money supply in the financial markets, impacting asset prices.
• CPI (Consumer Price Index): A measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.
• Bear Market: A market experiencing a prolonged period of declining prices, typically a 20% or more drop.
• Bull Market: A market experiencing a prolonged period of rising prices.
• Momentum Signal: An indicator used in technical analysis to identify the strength of price trends.

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S&P 500 All-Time Highs & Market Liquidity (2020-2024)

The discussion centers around the frequency of all-time highs (ATHs) for the S&P 500 index between 2020 and 2024, and the relationship between these highs and the underlying liquidity conditions in the market. The speaker highlights the remarkable resilience of the market despite a period of significant economic and geopolitical turbulence.

Historical Performance of All-Time Highs (2020-2024)

A key observation is the number of ATHs achieved each year:

• 2020: 32 ATHs
• 2021: 70 ATHs – a peak for the decade.
• 2022: 1 ATH (occurring on the very first day of the year, followed by a decline).
• 2023: 0 ATHs – a surprising statistic, as the 2021 high was not surpassed.
• 2024 (through the date of the recording): 57 ATHs
• 2025 (current year): 38 ATHs

The speaker emphasizes the contrast between the high number of ATHs in 2020, 2021, and 2024, and the complete absence of new highs in 2023. This is presented as “crazy” and unexpected.

Macroeconomic & Political Context

The period under review (2020-2024) was characterized by a confluence of extreme events, including:

• Record Employment Drops: Linked to the initial stages of the COVID-19 pandemic.
• Rapid Bear Market: A 20% decline occurring within 3-5 days.
• Swift Bull Market Recovery: A recovery from the bear market in April-May 2020.
• Federal Reserve (Fed) Actions: Both rate hikes and rate cuts were implemented.
• Stimulus Measures: Extensive fiscal and monetary stimulus packages were deployed.
• High Inflation: CPI readings reached 9%.
• Political Shifts: Periods with both Democratic and Republican administrations.
• Tax Cuts: Implementation of tax reduction policies.

Despite these diverse and often challenging conditions, the market continued to achieve significant gains, as evidenced by the frequent ATHs. The speaker notes that outside of a Great Depression, the market experienced nearly every possible financial condition during this timeframe.

The Role of Liquidity

The discussion connects the frequency of ATHs to the “liquidity cycle.” The speaker explains that liquidity bottomed out around 2018, expanded through 2021, and peaked in November 2021. Following the peak, rising interest rates led to a “liquidity squeeze.” This explains the lack of ATHs in 2023, as the market experienced a contraction in available capital.

Momentum & Market Signals

The speaker references a “momentum signal” that turned negative on the third day of 2022, predicting the subsequent market decline. This signal is presented as a reliable indicator of market direction. A cybersecurity event in February of the same year further complicated market analysis, as it resulted in a temporary loss of hedge fund data, creating a period of uncertainty ("flying blind").

Notable Quote

“There's no financial condition you can dream up outside of a Great Depression that we that hasn't think about.” – This statement underscores the extraordinary range of economic and political events experienced during the period.

Logical Connections

The discussion establishes a clear link between macroeconomic conditions, Fed policy, liquidity cycles, and market performance (as measured by ATHs). The absence of ATHs in 2023 is directly attributed to the liquidity squeeze following the peak in 2021. The momentum signal is presented as a tool for understanding and anticipating market movements.

Synthesis/Conclusion

The analysis reveals a surprisingly resilient market that has consistently reached new highs despite facing a multitude of significant challenges. The frequency of ATHs is strongly correlated with the availability of liquidity, with 2023 serving as a notable exception due to a liquidity contraction. Understanding the interplay between these factors is crucial for navigating the complexities of the financial markets. The speaker’s emphasis on the historical context and specific data points provides a nuanced perspective on market performance.