The stock market arguably has never been more detached from economic reality. With quarterly profits and revenues at some of America’s biggest companies poised to decline, the Dow Industrials and the S&P 500 are within spitting distance of all-time highs. “From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in the production, sales and employment that will spill into next year,” reported the lead story in Monday’s edition of the Wall Street Journal. And yet, with the nearly 1400-point gain the Dow has tacked on in this month, the blue chip average sits within 4% of the 18351 record peak achieved in May. For their part, the thimble-riggers who have kept this bull market going continue to rotate Other People’s Money into a dwindling number of stocks. The illusion cannot last. Nor can Amazon, Google and Priceline continue to carry a faltering U.S. economy, especially with venture capital’s “unicorn” companies pumped so full of hot air that even the rubes can smell the hoax. Make no mistake, it is time for investors to reef the sails.
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Today was about the most uneventful, time has stopped trading I have ever seen in my life. After a little overnight action in CL and NG, everything just drifted sideways, amazing. I guess if there is no major intervention, all the markets just flatline.
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The markets are as opportunistic as ever, waiting for any kind of “news” to provide a catalyst for a short squeeze. Perhaps we are watching that reflex die? RA
Does Apple have the same swagger as MSFT did during the 90’s? ‘softie’ used to routinely beat estimates and the stock would leap higher with predictability. $54 bil and $1.88 per share are lofty goals and if the rally is long in the tooth, watch Apple after the close tomorrow for a sign.
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The small doubts that have begun to cloud Apple’s “story” may now be stronger than the knee-jerk effect of the company’s still-impressive revenues and margins. We’ll know soon enough. RA