Blow horns you sure sound pretty
Your violins keep movin' to the nitty gritty
When you hear the scratch of the guitars scratchin'
Then you'll know that rhythm carries all the action, so
Turn the Beat Around
Hear that drumbeat? It's the continued conversion of Wall Street into believers, which makes me just a tad nervous. I'm not one of these guys that base their opinions on star alignment or disdain for the crowd, but I have to tell you for all the talk of the average investor being late to the party, the "pros" are always tardy as well. The thing is these pros control a lot of buying and can buy lots of air time to promote the ventures of investing even if they had a sea of "hold" ratings during the giant rally. One of the smartest guys I know, who is always bullish, called for Dow 18,500 yesterday.
It could happen, but fundamentals in America would have to get a whole lot better. In fact, the biggest threat to the rally is the American economy.
On that note there is no way the economy can live up to its potential over the next four years, but that doesn't mean it can't edge higher and even gain some momentum. Oddly some think such a statement is an endorsement of current economic policy when it's the exact opposite. The notion the economy wasn't built to last was bought by a whole lot of people looking for a greater chunk of wealth once the loot was passed around. As it's working out, capitalism is fighting back even if it has one hand tied behind its back. But my basic thesis on the market still reflects more on global growth than domestic bliss.
That said, he Street is getting excited about the US economy, and more jumped on the bandwagon after monthly retail sales came in better than expected. Yes, Americans laid out more dough than the pundits figured, but man it wasn't the kind of outlays that makes people happy. In fact, while the worst may be over the lingering pain and healing process still have a way to go.