Friday, 21 November 2014

A Leading Economic Indicator and The Stock Market - Disconnection Taken To New Highs

Can it really be the case that the stock market is independent of economic developments? I admit, I'm starting to sound a bit like a broken record, but better safe than sorry. The truth is yes, the stock market can act independently for a while as low interest rates and an ever increasing money supply channels return-starved funds to the stock market casino away from the more risk averse options. 

But the reality of the real economy hits Wall Street with a big hammer from time to time, knocking the stock market down to a more sensible relationship with the overall economy. Better be on main street and not Wall Street when that time comes soon again.