Stocks jumped back into the green yesterday, with the Dow Jones Industrial Average and the S&P 500 Index perched at just about the same level they were exactly one month ago.
Despite a crippled economy and weak projected earnings to show for it, there’s still an appetite for buying companies at sky-high prices … and that should come as no surprise.
After all, the Fed’s following the same playbook it’s used for decades to prop up the market. And it’s worked so far, right?
But this familiar story has a twist ending.
Back to Reality
Whether it’s a “double bottom,” a “long U” or a “swoosh” … whatever shape this stock market ride takes … at the end of the day, what matters is the real economy.
We need to have real people, producing real goods and services, underpinning the economy before we see a sustainable, long-term recovery in the stock market.
In today’s video, I’ll show you exactly how Fed policy has propped up asset prices for decades … and why the scale of what it’s doing now is not sustainable.
You’ll also discover:
- This measure of S&P 500 companies has only been as high as it is now twice … right before the Great Depression and right before the dot-com bust. (10:04-10:57)
- What my prediction means for stock prices this year and next. (16:02-17:15)
- Why more and more top Wall Street analysts agree with me on this issue. (14:01-16:02)
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Editor, The Bauman Letter