Gold Still Getting A Bid; But Stocks Blowing Their Lid

On the S&P 

Oblivious to declining amount of money it takes to move the S&P one point (now just 69% of what 'twas on 29 January), and oblivious of course to unsupportive earnings (our live price/earnings ratio now 30.9x and Bob Shiller's Cyclically-Adjusted PE now 30.4x), and oblivious to the lack-luster (that's being nice) Economic Barometer, the S&P we're still told is the place to be. But from the "Why Is This Man Smiling Dept." it's because he stays within the relative cash management safety of trading the futures markets rather than losing sleep over stock market exposure! To wit:

  • The thinning amount money needed to drive the market is making it easier to go up ... but it will in turn also make it easier to go down, and in a hurry at that;
  • A notable markets maverick on the radio said this past week we ought not to worry about earnings; rather, just follow what the institutional traders are doing. Of course, that works well until it doesn't. And with respect to those cited truthful p/e ratios, they're in and around those levels that preceded stock market crashes in 2008, 2001, 1987, and 1929;
  • Further with our reference a week ago to the notion of financial writing pools being populated by children, we oft think their mates and siblings are running money desks as well;
  • Indeed during the week we read that the "S&P 500 ends at 4-month high as stocks rise after strong economic data." Really?  It was also simultaneously written that "A Weaker Economy Means It’s Time For Growth Stocks to Shine Again." Oh please. Retail Sales are sound, and to be sure the consumer is the overwhelming driver of the economy ... but March's New York State Empire Index -- which was expected to increase from 8.8 to 10.0 -- actually succumbed to just 3.7; February's inflation data slowed at both the wholesale and retail levels; and January's New Home Sales fell short of both those from the prior month and from what was expected.
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