We Have Nothing to Fear but a Lack of Fear Itself

Posted by Chris Puplava - Financial Sense

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01-citiecon-regions

Overview:

 

  • Stocks are hitting new highs despite negative string of econ reports
  • ECB QE begins this month, likely levitating stocks
  • Improving junk bond market, yen-carry trade, and growing bank credit also lending support
  • While markets are at new highs, bullish sentiment shows investors are getting complacent

 

The S&P 500 had its first monthly close above 2100 in February, the Dow closed over 18,000, and the NASDAQ currently rests a mere 3% below its 2000 bubble peak of 5132.52. Why is the stock market heading higher when incoming economic data is surprising to the downside? The Citigroup Economic Surprise Index (CESI) for various global regions shows data for the U.S. currently rests at the lowest levels seen in nearly three years while the European CESI is near a two-year high.

01-citiecon-regions
Source: Bloomberg

What is surprising is the resiliency of the U.S. market in the face of such a sharp decline in positive economic surprises. Declines of the current magnitude have often marked the big corrections we’ve seen during the bull market.

….continue for 9 more charts and the summary HERE