Is The Stock Market Nuts?

As stock market wavers, investors begin to doubt

The increase is 21.5 percent, or $4.2 trillion. What’s more, there’s a widespread expectation that stocks, despite temporary setbacks, will continue to advance. After all, the Federal Reserve is pumping $85 billion a month into financial markets — about $1 trillion a year — by buying bonds. Much of that money (the theory goes) props up stock prices. The impending change in leadership from Ben Bernanke to Janet Yellen as Fed chairman is viewed positively.

Tony has spent more than 40 years studying and analyzing the markets. Hes one of the best stock market analysts I know. Heres what he has to say about stocks right now The only obvious difference between Janet Yellen, the incoming Chair [of the Federal Reserve], and the present Chair, Ben Bernanke, is in their gender. Investors who have loved Bernankes monetary abandon are already placing their money on Janet being just as energetic in keeping the money pump going.

2014: The Year the Stock Market Topped Out?

Federal Reserve

The trouble click is the global economy still struggling to gain strength. Ned Davis, of Ned Davis Research, told clients in a recent report that he shares Gross concern. I am not going to forecast profits, but I do think they have been boosted by a number of factors that are either temporary or unsustainable, Davis said. When trying to determine the actual value of a stock, he added, I would question how much near-cyclical highs in profits and profit margins are worth. Those questions are likely to arise more into 2014 as analysts consider when the Federal Reserve will be cutting back on stimulus. The expectation is that the Fed wont be making any moves until 2014, although the Dows recent dip came when a stronger-than-expected ISM manufacturing report stoked speculation that the Fed might start tapering stimulus as early as its Dec. 17-18 meeting.


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