Michael Gayed:
Denial ain’t just a river in Egypt.
–Mark Twain
So let me get this straight: The GDP revision for first quarter came in far worse than economist estimates, and the stock market simply doesn’t care? Enough with the weather excuse. Enough with the Russia excuse. The bond market since day one of this year has been pessimistic on the economy. So far, data proves that Treasuries are right. Something is very much amiss in the narrative that stocks continue to put false belief in, and the way deflation trades are behaving. This is no longer opinion. This is no longer conjecture. We cannot simply turn a blind eye to data that is weak and argue that all bad news is good news for stocks. At some point, bad news is bad news.Â
At some point, volatility will rise from the ashes of complacency.
The biggest and most disturbing thing thus far about the stock market’s denial of the economy is the stock market’s denial of itself. Utilities have been remarkably strong all year, albeit in most recent days weakening just a bit at the margin. Treasuries have been shockingly strong. More problematic than all this, however, is the market internally not believing in the consumer anymore. We all know just how important consumer spending is to the economy. A healthy economic environment should be led by stocks, which are most sensitive to the economy. Conversely, when consumer stocks are weakening, the market may be anticipating some kind of slowdown more broadly ahead, which equity averages would then act with a lag to.
That’s kind of happening, isn’t it? Take a look below at the price ratio of the SPDR S&P Retail Index (NYSEARCA:XRT) relative to the S&P 500 ETF(NYSEARCA:SPY). As a reminder, a rising price ratio means the numerator/XRT is outperforming (up more/down less) the denominator/SPY. This is one of the uglier relative charts that one can view markets through the lens of, and is sending a clear message: Stock market denial is real and can only persist for so long.
I’m no expert on the market, but I’m guessing that good things to be invested in now are, guns, gun accessories, ammo, and survival food and equipment.
I don’t have any faith right now in the stock market. It’s rollercoaster behavior has been very out of the ordinary. I suspect day traders have made the market far too volatile for most to fathom how any particular stock is valued. Short sellers and pumpers have complicated matters even worse.
@Ditto: #2
There are two things that sound like a good idea: (1) Buy BitCoins. (2) Buy gold.
The major problem for people like me is that the money would come out of my IRA, and I would have to pay taxes on it. Would I loose more by leaving the money in the IRA and take the hit on stocks, or would it be better to take it out and buy one or both, then sell them later if I could make a profit from the sale? The other problem is, as far as I know, BitCoins can only be sold over the Internet. If obama gives the Internet away, and whoever owns it shuts down the USA, how will you spend your BitCoins? How is it possible that ONE person in the whole USA can give away the Internet?