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CLOSING A SOLID WEEK WITH A STRONG FINISH
[Chart courtesy of MarketWatch.com]
- Moving the markets
The record setting pace continued with all major indexes scoring impressive gains. The S&P 500 managed to add almost 2% in the past five trading days alone and has traded now 70 straight days without a 1% loss.
While some econ numbers were less than impressive, Housing Starts surged 16.9% MoM to the their highest since 2006, despite a sharp drop in Permits, which shrank -3.9% MoM, far worse than the -1.5% expected.
Wall Street simply remains in rally mode with weak data being ignored, and strong ones being used to boost stocks to ever higher levels. Regarding the above housing numbers, it’s important to note that they are one of the more critical metrics used to evaluate the health of the economy, while the Fed’s low interest rate policy keeps the buying interest up.
Sure, as ZH pointed out correctly, stocks have reached most expensive and most overbought levels, which even surpass the DotCom bubble. This is a bull market on steroids thanks to the loose Central Bank policies, as I have pointed out before.
We’re overdue for a correction, but this being an election year, whatever the powers to be can do will be done to keep the markets elevated. After all, when it comes time to cast your vote, you will vote based on how you feel about the economic circumstances.
Right now, the markets give the feeling of being one giant party; and we will dance along but stay as close to the exit doors as we can.(more…)