It stands to reason that while everyone was looking the other way (i.e., at the election and all the sturm und drang that followed it), the market would be setting records left and right.
And we’re not just talking about new all-time highs on the Dow and S&P 500. The NASDAQ Composite has also broken to clear new highs, while both the long bond and gold appear to be probing new lows for their respective moves. More than that, some of the biggest cash flows in the last five years out of the Treasury Bond market and precious metals are occurring as we write.
Have a look at the charts –
All told, better than $12 billion left these two sectors in the past month, while over $34.5 billion entered the equity sphere. That’s a level of buying we haven’t seen since October, 2013.
We mentioned last week that the financials had scored their biggest monthly gain in history with the end of trading in November, and we now add that recent data from Goldman Sachs shows that a number of widely watched stock metrics are also screaming ‘New Record!’, ‘Beware!’, and ‘Shave the Porpoise!’
Take a peek –
What’s perhaps most alarming about the above is that we’re now in the 98th percentile of historical valuations!
That said, those same Goldman analyzers, without blinking, tell us that we’re headed for S&P 2425, a full ten percent higher than current levels!
And we’re left to wonder… which way next? Is it possible that trees will grow to the sky?
That depends who’s watering ‘em…
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With kind regards,
Hugh L. O’Haynew