The Great Divide Between Stocks And The Economy
The comments below are an edited and abridged synopsis of an article by Lance Roberts
Currently, the optimistic view is that stocks have it right. This point was made in a recent interview with Ed Yardeni:
“The market has been a ray of sunshine. Basically, investors are convinced that we’ll get out of this, and the economy will recover along with earnings. So far, that forecast seems to be working out pretty well. The economy may very well be catching up with the stock market rather than the stock market going off on its own.”
Up for discussion: the relationship between stocks and the economy; stocks running off of bad economic data; the BLS in error; the one-time bump may fade quickly; the economy may disappoint; the recovery to nowhere; the stock market isn’t the economy; profits to GDP; and reversions happen fast.