Markets have been on a tear over the past few days, taking back virtually all the losses of March, the reason is simple, Quantitative Easing: the truth is for the past 6 years the correlation between the market rise and quantitative easing has been 97%.
The algos got the message, when the government pumps liquidity the markets rise, independently of what the economy is actually doing. Unemployment at a 30 year high, markets rise, Neman Marcus bankruptcy markets rise.
The truth is that market is no longer a predictor of anything but that the government is pumping liquidity; for Trump, it has been a sign of his success -- and therefore a good thing. It has for the past few years been a given that rising market are a sign of good economic health -- don't let the main street get in the way of the message.
The truth is that as of today, the average p/e is around 20x (an all-time higher). The truth is that earnings guidance has been poor for the past two years, but the Feds have made sure that the party on wall street continues.
enjoy while it lasts (my guess November 2020)
The algos got the message, when the government pumps liquidity the markets rise, independently of what the economy is actually doing. Unemployment at a 30 year high, markets rise, Neman Marcus bankruptcy markets rise.
The truth is that market is no longer a predictor of anything but that the government is pumping liquidity; for Trump, it has been a sign of his success -- and therefore a good thing. It has for the past few years been a given that rising market are a sign of good economic health -- don't let the main street get in the way of the message.
The truth is that as of today, the average p/e is around 20x (an all-time higher). The truth is that earnings guidance has been poor for the past two years, but the Feds have made sure that the party on wall street continues.
enjoy while it lasts (my guess November 2020)
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