June 1, 2011
Yesterday, the Wall Street Journal published an article about the day’s stock market action. It was a good day. The Journal, although somewhat restrained, found an equities analyst who shows the signs of coming troubles, so utterly confident was he. This is happening more and more, and as always, signals a return to that “irrational exuberance” so well coined by Alan Greenspan: when sentiment is that high despite a much worsening slew of economic data . . . take care.
Wall Street Journal
US Stocks Finish Higher, Shrug Off Weak Economic Data
The Dow Jones Industrial Average staged a late-day surge to close near the day’s highs, up 128.21 points, or 1.03%, to 12569.79. The Standard & Poor’s 500-stock index rose 14.10 points, or 1.06%, to 1345.20, while the Nasdaq composite gained 38.44 points, or 1.37%, to 2835.30. . . In spite of weaker readings on home prices [an eight year low], regional manufacturing [In the midwest, new orders and production posted their largest declines in several years], and consumer confidence [a six month low], all but one of the 30 Dow components and all 10 sectors in the S&P 500 were in positive territory.] . . . [my notes in brackets]
“Kent Engelke, chief economic strategist at Capitol Securities Management, said he has been unconcerned by the recent spate of negative economic news. ‘Tell me something I don’t know about housing,’ he said, while adding that volatile regional manufacturing surveys were still outweighed by a general expansion in the U.S. manufacturing sector. ‘Underneath the surface, economic activity is actually stronger than anticipated.’”
Uh huh. Well, despite the euphoria on display by the unidentified stock broker below, I do not have happy feet . . .
