Prediction markets are debating how high the S&P goes this year

Summary

The speakers contrast roughly $2.2 million traded on a prediction market about the S&P exceeding 8,000 this year with the much larger sums traded in financial markets. They argue that actual market flows, the VIX, and movements in major technology stocks provide more meaningful signals than small prediction markets or opinion surveys.

• The prediction market discussed concerns whether the S&P will exceed 8,000 this year.
• The S&P is quoted in the transcript at 7,758, after reaching 7,770 earlier that day.
• Roughly $2.2 million in prediction-market activity is described as small relative to broader market trading.
• The speakers favor actual capital flows over surveys as evidence of investor sentiment.
• They describe the Nasdaq as reaching another all-time high, helped by Meta, Apple, and Nvidia.
• Recent technology-stock declines are characterized as pullbacks rather than the breakdown some commentators predicted.
• Meta and Apple are highlighted as stocks to watch for clues about market strength.

1. 0:00

   Again, I'm not saying in all prediction markets that they're superior to where people are putting real money to work. They are putting money to work on prediction markets, but the amount of money on this one, Pete, is

2. 0:15

   2 million 2.2 million, let's call it, have been wagered or traded or bet, however you want to view it, that the S&P will get above 8,000 this year. Um it is presently at 7758.

3. 0:31

   It was 7770 earlier today.

4. 0:36

   And $2 million, I mean, shoot.

5. 0:40

   The traders in the S&P pit probably to a man or woman trade multiples of that every few minutes, let alone [laughter] 2 million over the course of months and months and months. So, you know, you can pay attention to prediction markets, and

6. 0:58

   I think you're wise to do so, but you're also wise to listen to what Pete says about the VIX and what real movement is in the market where trillions of dollars are being wagered, if you will, or bet, or traded, rather than just 2.2 million.

7. 1:17

   >> Well, and it's why you and I oftentimes don't listen to a lot of the crap that we hear throughout the day on television when guys are telling us, "Well, you know, they they did this survey." I don't care what 3,000 people say. What I want to see what a couple hundred thousand people, maybe millions of

8. 1:34

   people, have decided to do with their money, cuz that's where the moves are, right?

9. 1:40

   So, it it's interesting, John. I mean, you know, the Nasdaq just hit another new all-time high. A lot of that from Meta. Throw in Apple. Throw in some Nvidia. I mean, some of these various names. And those are all the names, by the way, that were told by by many that, "Oh, boy, these things are they're inflated. They're they're this thing's going to break. Well,

10. 2:00

    I don't know when they expect that, but I would say that right now and as of right now, um that hasn't happened. Yeah, there's been some pullbacks, no doubt, pullbacks, but they're pullbacks. And then all of the sudden you get that next wave. And I think if you want to look the closest one that makes the most sense, just watch Meta. When you see the

11. 2:19

    way that thing moves, it really is very telling. And I'd also say, you know, a name as big as Apple is not another bad one to take a look at, too. But see how they're moving and what the money really looks like because the flows are strong.

12. 2:33

    And I'll tell you, it's uh it's it's interesting to me, John, all the crap that we hear from all these people about this, that, and the other that that's meaningless. And you know what? This this this one at the 8,000 level, like you just said, with 2 million people or 2 million bucks or whatever it is, that's uh who cares?

13. 2:51

    >> [laughter]

Transcript from the show's YouTube captions; automatic captions may contain errors. Educational content, not investment advice.