FINANCIAL MARKETS DEMONSTRABLY DETACHED FROM REALITY...
Ever since "Printapalooza" started in the basement of the Eccles building in 2008, financial assets have been on a long strange trip, a trip that has seen them floating on a sea of conjured-up currency units, and increasingly detached from the economic realities of the day.
Nowhere is this more evident than in the major averages. Consider the chart of the S&P 500 compared to that of Nonfarm Payrolls Report, arguably, one of the most economic reports each month. Notice that the index closely followed the fate and fortune of the Nonfarm Payrolls report, rising and falling in line with the economic realities as noted in the report. That is, until now. Note that as Nonfarm Payrolls have fallen back to the previous lows in 2002, and 2008, respectively, the S&P, has not even come close to its previous lows of the same era. Moreover, it has regained nearly all of the recent drop, while Nonfarm Payrolls has languished at the lows.
Yes, I know the market looks forward, and nonfarm is coincident, but I have been in the game too long to keep hunting Unicorns!
Nowhere is this more evident than in the major averages. Consider the chart of the S&P 500 compared to that of Nonfarm Payrolls Report, arguably, one of the most economic reports each month. Notice that the index closely followed the fate and fortune of the Nonfarm Payrolls report, rising and falling in line with the economic realities as noted in the report. That is, until now. Note that as Nonfarm Payrolls have fallen back to the previous lows in 2002, and 2008, respectively, the S&P, has not even come close to its previous lows of the same era. Moreover, it has regained nearly all of the recent drop, while Nonfarm Payrolls has languished at the lows.
Yes, I know the market looks forward, and nonfarm is coincident, but I have been in the game too long to keep hunting Unicorns!