I just have to say, getting ignored affects my sense of worth, my confidence, and it marginalizes me in my profession. Why is the market ignoring my advice? Why is it gobbling up points as if there were no tomorrow? Doesn’t it appreciate the work I do to come up with the advice?
So, here we are at new record highs intraday for the S&P 500. It surely did not take long to get back here, once the market decided it wanted to move up.
- U.S. stocks jumped, with benchmark indexes rising to all-time highs on a closing basis, as an unexpected boost in stimulus from the Bank of Japan spurred optimism in the global economy.
Yes, Japan has been the ignored economic child here for quite some time recently. I say “recently” because the land of the rising sun was lost in the land of stagflation for some 20 years. It then found its way back two years ago only to get lost again, this time in the land of rising sales taxes.
- Japan’s economy shrank an annualized 7.1 percent in April-June from the previous quarter, worse than a preliminary estimate, and adding to doubts over whether the central bank can achieve its target of 2 percent inflation early next year.
“Japan is lost again,” the world said and then it began ignoring the poor child. Well, it appears Japan is again trying to emerge from the land of the lost economic children, trying to reengage, trying to become relevant. At least for today, the market is paying attention.
Then again, since the market ignored my advice about small bites and chewing slowly, it might just ignore Japan again in favor of the US economy, which could be the reason the market is breaking into record territory again.
- Better-than-forecast corporate earnings and optimism in economic growth pushed the S&P 500 past its Sept. 18 all-time high of 2,011.36.
The above cracks me up. True, corporate earnings are better than expected, but optimism in economic growth? Are you kidding me? Just last week the breathless media was telling us the market lacked optimism in economic growth, certainly on a global scale, but in the US as well. Remember the “dip” in durable goods orders for September?
I guess none of that matters anyway, as right now, this moment, as these words appear on my screen, the S&P 500 is at 2014 and the Dow is at 17,362, both record highs. The Russell 2000, BTW, is now only 42 points below its 52-week high, which puts it almost exactly even with the S&P Mid-Cap at 40 points below its 52-week high. The NASDAQ is 20 points above its 52-week high, which puts it at its highest since the turn of the last century.
There is something in the air, something more than just good news on manufacturing, industrial output, and consumer confidence.
- Wages and salaries, which account for 70 percent of employment costs, rose 0.8 percent in the third quarter, the largest increase since the second quarter of 2008. They had gained 0.6 percent in the second quarter.
Oh yeh, I almost ignored one other factor that leads to the following conclusion, which could explain why the market is pushing higher, hard and fast.
- With gasoline prices at a near four-year low and improving wage growth, consumer spending is likely to rebound in the months ahead.
Interestingly, the other economic news that came out today is that consumer spending dropped off in September, actually declining .02. I guess that doesn’t really matter to the market. In fact, based on today’s movement, I might argue the market is ignoring that fact for two reasons. First, wage growth and lower energy prices do make room for more consumer spending.
Second, it might just be that in September consumers took a break after historic consumption in August. It could also be that year-over-year both August and September retail sales are improving and have been for five years.
Yeh, maybe it is the economy and earnings that have driven the market to ignore my advice. Oh well, then, pay attention to Japan at least.
Trade in the day; invest in your life …
