The US stock market has shown great resilience in the face of negative economic news in 2015. Or the stock market is overpriced and is not reacting to negative news.
Take for example the S&P 500 index plotted against the Citi Economic Surprise Index. Since late January 2015, the economic news has been worse than expected (surprise!) yet the S&P 500 keeps on rising.
How about the Q1 GDP forecast? It has been crashing but the S&P 500 index keeps on climbing!
So how about Q2? Economists are calling for a “rebound” effect where consumers and business will bust out in terms of spending now that the frozen Q1 of 2015 is over. But will it?
Here is a chart of the Baltic Dry Shipping Index versus the average temperature at JFK Airport in New York City. New York City is warming up, but the Baltic Dry Shipping index seems frozen.
The stock market’s performance helped by Iron Man (aka, The Fed) has not helped wages or income inequality.
The US stock market is Iron Man. Or at least Janet Yellen is.
Meanw
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