Economic indicators are sliding, yet analysts are strangely upbeat in their forecasts, a troubling similarity to the past. Overestimating earnings and missing key downturn signals led to significant market drops before. This pattern is waving the red flag once again—a concerning recurrence that could lead to market volatility and financial instability.
Too many fools believe that the shortest bear market in history corrected the longest bull market in history. When it merely prolonged the cycle.
Setting the stage for a much larger crash. pic.twitter.com/ivrDVNFVsb
— Mac10 (@SuburbanDrone) November 12, 2023
WSJ: "FOMO Is Back"t.co/01KMYxyn4m pic.twitter.com/GUHhkUXU5a
— Mac10 (@SuburbanDrone) November 12, 2023
WSJ: Is the Stock Market Rally About to Rev Up?
Investors are embracing stocks and eyeing a year-end rally in markets
FOMO in the stock market is back.
A lightning-fast rebound has driven the S&P 500 up in nine of the past 10 sessions and 7.2% over the past two weeks, the best such stretch of the year. Now, many investors are betting the rally has legs.
CAUTION: Analysts are repeating the SAME mistake they made during the 2008 Financial Crisis
Leading economic indicators are contracting sharply
But analysts are revising their earnings estimates upwards
Last time, this preceded a significant decline in the markets
And a LOT… pic.twitter.com/7pZ8pHOMF3
— Game of Trades (@GameofTrades_) November 12, 2023
Ryan McMaken: The Fed Has No Plan, And Is Just Hoping For The Best
The Federal Reserve’s Federal Open Market Committee (FOMC) last week left the target policy interest rate (the federal funds rate) unchanged at 5.5 percent. This “pause” in the target rate suggests the FOMC believes it has raised the target rate high enough to rein in price inflation which has run well above the Fed’s arbitrary two-percent inflation target since mid-2021.
I say “believe,” but perhaps the more appropriate word here is “hope.”
That is: the Fed hopes it has raised the target interest rate high enough. Moreover, the Fed hopes this will both reign in price inflation and also avoid raising unemployment too high. (See below for what is meant by “enough” and “too high.”)