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Why The Last Thing US Equity Markets Want Is Good Data
When, amid the plunging stock market in October as we neared the end of QE3, Jim Bullard said QE4 was possible; not only did markets then undertake the longest and most consistent streak of gains in history, he appears to have entirely changed the market's reaction function to data...
Just as Yellen was set to pull the market's liquidity feed, Bullard's comments implicitly imprinted a new narrative. For months in the lead up to the end of QE3, markets and macro data were tightly coupled as investors saw economic strength as supportive of the recovery meme. However, as the realization - following the end of the government's fiscal year in September - that the economy was not reaching escape velocity, that global geopolitical risks no longer had a harness, and that the oil price drop was perhaps not unequivocally good; investors started to pull back.
Then Bullard's comments changed all that. Having been conditioned to 'know' that money-printing means rising stocks (over the past few years), his comments provided support for the view that if things get worse economically, then The Fed will be back with moar money-printing and stocks will rise.
In other words, the fact that equity valuations and fundamentals are entirely decoupled is not irrational exuberance, it's a rational conditioned reflex to a Fed that will never - ever - as Alan Greenspan noted - be able to remove itself from the equation.
"Bad News is Good News" - Thank you Mr. Bullard.
Chart: Bloomberg
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UH OH! Sooner or later.....
Don't expect the market to crash... ever.
The way it will happen is that one day, the market will simply be closed for trading, and some cause will be blamed (chinese hackers, a solar storm, a computer glitch, national security)
Peter Schiff is going to be proved correct again.
Dupe
peter might be right, but all this GREED is making me worry.
There is so much bearish ness out there right now, its almost bullish, if you know what I mean.
this guy from OZ has accurate FEAR GREED INDICATOR here ==> http://bit.ly/1fMcakI
It looks like its all GREED, and that has made the market go down, several weeks later.
I know 99% of people are bearish in here....right? and the world is going to end tomorrow, but I think it will be all about YELLEN this week. And the Bullshit that comes out of her month. Cant wait. LOL
free $ is the shit! Dow 20,000 coming up Bitches!!!!
Dow 2,536,981 after that!
Print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print...
who down arrowed you? Seriously. DOW 20,000 is a fucking fact buttressed by "free $ is the shit!" +100
No need to close it, just start printing trillion dollar bills. Here's a look at the best performing stock market in history, and our future.
http://www.goldonomic.com/zimindus2007.gif
You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!
Pavlov's market
my guess is it will be engergy sector bonds that will explode. shale oil koolaid will create quite the hang over.
my co-worker's ex-wife makes $80 hourly on the computer . She has been out of work for 10 months but last month her paycheck was $12310 just working on the computer for a few hours. look at this now... www.globe-report.com
Because the markets actually rise higher on bad data.
i am hedging my longs with 5x long AAPL... has been working so far
Fortunately for stocks there is no chance we get any meaningfully good data in the forseeable future.
Does anybody belive that the fed is not pumping the markets?
Steve Liesman?
The market is being monetized through the bank of Japan now so there's no problem. It's called the Tokyo Twist.
Tokyo " tit" Twist
Fuck you Bullard and the horse you rode in on!
HBOe 501 is launching Citizenfour tonight. Quite a surprised. Will present my views after watching. Fact vs. fiction.
there is a possibilty that the dollar loses strength and gooses the bottom line of the s&p causing the market to spike, leading to the conditions neccessary for a rate hike.
When there's nothing profitable to invest in, invest in the stock market.
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Bullard pulled a Draghi, that's all.
And the markets fell for it.
Like the EU, sometime in the future, the markets will look to the Fed, like a child riding a bicycle for the first time, and suddenly realizes the parent isn't holding on, and the mere thought of looking back, the child will fall off.
Or the parent will catch them.
Tick-tock. Which will it be?
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V-V