Control Panel: bull market too good to last?

The bull market trends in stocks and bonds have lasted long enough that the financial press is publishing reasons why they may not continue.

The manufacturing and housing sectors have already experienced recessions, with output contracting. But consumer spending (roughly 70% of GDP) and the service sector are still growing. Inflation has declined but that could reverse. The economy seems to have made a soft landing…at least for the time being.

The SPX hit a record high this week. The last record high was on Dec. 28, 2021 and the latest low point was Oct. 27. 2023.

The Fear & Greed Index is in Greed. The trade is risk-on. The CAPE is in bubble territory though slightly off its recent high.

Treasury yields have risen slightly over the past week. It’s hard to say whether this is noise or a trend that will continue.

The METAR for next week is sunny.



That is standard financial journalism. Any time something does well, some one somewhere asks how long that can last.

Are you watching Nvidia? It spent most of last year hovering around $450. Closed Friday at $595. And it doesn’t report earnings until end of February. AMD is also doing well. It report Jan 29. And then there’s Tesla due to report Jan 24. Can it continue to grow earnings in spite of concerns about Electric Vehicles.

Clearly this all started Oct 27 when Chairman Powell seems to be backing off on the need to raise interest rates some more. Soft landing seems likely rather than recession. But many stocks were fully valued and flattened in the last few months. But after Jan 1 the race is on. Interest rate cuts have much potential to drive the market. Some think before the election.


Meanwhile, elsewhere: