The cheerleaders talk about the economy growing, but the economy grew at 7 percent from 1966 to 1982, while stocks went nowhere because valuations were too optimistic. And they're optimistic now, by historic measurements.
Typically at the beginning of the year, there is a tendency toward reinvestment dollars, which should at least give the market a hint of an upward rise.
The big concern is future inflation and the Fed is viewing that through the labor market. Wage growth continues to be muted.
The rally will extend and challenge December highs. But it's not a bull market. We're just bouncing back from January lows back to the top end of the trading range.
The narrowing of the trade gap and claims coming in at four-year lows has a lot to do with today's market action.
I've been investing in boring things, and boring has been pretty good.
Yet you can make good money in that environment. It just takes a different strategy; you try to hold a core bunch of stocks you think are in secular bull markets and trade at inflection points.
I don't know how to handicap terrorism, other than to say that I think the risk premium should be higher than it is. But I think I can predict, directionally, earnings and the momentum of the economy.
There is a lot of noise in the short interest figures, ... It's a stretch to come to a market investment conclusion or even an inference based on short interest.
I'm not bearish. I don't think we're going into a recession and I'm not worried about deflation ... But earnings growth should only be about 7 to 8 percent this year and guidance for earnings keeps coming down.
