This One Market Health Signal Says "Watch Out"
But there's something you've got to know...
By D.R. BARTON, JR.
A market making new highs without the breadth making new highs is still an early warning sign – but it's just that.
Here's a quick look at what's going right in the markets:
The "story stocks" (they mean the "FANGs" here: Facebook Inc. (Nasdaq: FB), com Inc. (Nasdaq: AMZN), Netflix Inc. (Nasdaq: NFLX), and Alphabet Inc. (Nasdaq: GOOG), Google's parent, are posting enormous gains and beating all expectations.
The Federal Reserve remains extraordinarily dovish on rates (1-1.25%) as do central banks globally (negative policy rates across Europe and Japan). One of their primary objectives continues to include asset price inflation ("wealth effect").
On the policy front, investors have been promised massive tax cuts, unending deregulation, and a boom in infrastructure projects, and they are responding with all due optimism.
And Pension Partners confirms there's a tailwind pushing the broader economy, too.
Earnings are at a record high, and profit margins remain near their highest level in history.
The unemployment rate (4.2%) is at a 16-year low.
Jobless claims are at their lowest level since 1973.
The U.S. economic expansion, at 99 months, is the third-longest in history.
Manufacturing (ISM) sentiment is at a 13-year high.
Consumer confidence is at a 17-year high.
Housing prices nationally continue to hit record highs, gaining 6% in the past year.
Average hourly earnings are up 2.9% in the past year, their highest level of the cycle.
Inflation remains low, with core CPI below 2%.
Source: Money Morning
https://moneymorning.com/2017/11/07/thi ... watch-out/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"