Look, if your financial adviser called you up with a stock recommendation and said, “The fundamentals are lousy, but look at that price momentum,” would you hang up the phone? Or maybe call your local regulator? Would you really buy that stock? Please say no. But this is the current state of affairs in the equity market.Article contentUntil just the past couple of weeks, it hadn’t dawned on the S&P 500 that the real 10-year interest rate had jumped all the way back to 1.
Not to mention the skew from one of the top five per cent balmiest Januarys of all time and the distortions to nonfarm payrolls and the service-sector imputations in the consumer price index that just about everyone buys into hook, line and sinker. The weather, until this week, was so warm that natural gas prices have plummeted 66 per cent since mid-December, oh, but that hasn’t exerted any impact on the “hot” seasonally-adjusted economic data so far this year? Sure thing.
That may end up being laudable for the future. After all, look at the “short-term pain for long-term gain” strategy unveiled by Paul Volcker in the early 1980s that ended up ushering in nearly a decade of uninterrupted economic growth and a huge bull market .
France Dernières Nouvelles, France Actualités
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