EC A Goldilocks Moment?

Also on the economic front, we learned last week that Job Openings hit their highest level ever and that the IMF upgraded its growth forecast for 2021 to 6% from 5.5%.

Oh, and a guy named Powell, who is in charge of a bunch of central bankers here in the U.S., had some good stuff to say on "60 Minutes" last night. Powell told CBS's Scott Pelley, "We feel like we're at a place where the economy is about to start growing much more quickly."

Next, it is important to note that the quarterly earnings parade will start to roll next week. According to FactSet, EPS for S&P 500 companies are expected to grow by 24% year-over-year. And in case you don't follow such things, I can attest that Wall Street analysts have been very busy upping their earnings estimates for companies this year.

Finally, I find it interesting that even the worry over rising in interest rates seems to be fading. While just about everybody on the planet (including one Mr. Dimon) expects rates to rise this year, the current narrative is that rates are now rising "for the right reasons." In short, the consensus seems to be that rates are rising due to the anticipated improvement in the economy and increased supply, and NOT because inflation is expected to get "too hot."

So, with all of this good stuff hitting the wires recently, is it any wonder that the S&P 500 closed out the week at an all-time record high?

Yet at the same time, all of the above has me wondering if the porridge might actually be getting a little hot for Goldi's taste at the present time. After all, the news is all good here (save the worrisome increase in COVID cases in certain places, of course) and nearly everybody knows the bull case with the S&P 500 now up over 10% on the year when dividends are included.

Couple this with an overbought condition, sentiment readings that are starting to reach the upper bounds, and valuations that are nothing short of extreme, and well, the table looks like it might be getting set for the bears to come out of hibernation at some point. (Note the abundance of red on our Early Warning Indicator Board below.)

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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should ...

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