What a week for stocks! Although the gain was just over 1%, the week culminated unrelenting strong upward movement this year by breaking through the 1500 barrier of the S&P 500 Index. I suppose I’ll never forget those Wall $treet Week celebrations as the Dow Jones Industrial Average regularly broke through even-numbered barriers. The host of the show morphed into the head stock market cheerleader of the go-go nineties. Dow 10,000 was celebrated with balloons and confetti. Of course, we all know that balloons burst and confetti is made from worthless paper. Everything came crashing down in the spring of 2000 and again in 2008.
The VXO fear gage remained fixed around the very complacent 12 area, while precious metals fell 3%. This earnings season it’s telling to routinely hear quarterly report results minus adjustments. In the old days, Amazon.com pulled that trick regularly to obfuscate the true picture of its results. Now, it seems everyone is getting into the act. Of course, the stock market cheerleaders eat up and perpetuate this kind of reporting. The other phrase we hear today is beat expectations. Since expectations can be pretty low, this makes spinning a positive headline from a negative report simple. Just like “this time it’s different,” “a whole new paradigm,” and “green shoots,” these lies belong on the ash heap of honest reporting.
Monday, markets in the U.S. were closed, but stocks in Asia fell 0.4% while those in Europe rose slightly. Tuesday, stocks in Asia erased Monday’s loss rising 0.4%. In Europe, stocks fell 0.6%, but in the U.S. they rose 0.5% on low moderate volume while the VXO dropped below 12. Stocks in Asia closed slightly lower and in Europe slightly higher Wednesday. In the U.S., the House of Representatives voted to kick the can down the road with the debt ceiling. U.S. stocks responded by closing flat for the day on low volume while the VXO closed at 11.81. The S&P 500 Index inched ever closer to the lofty 1500 mark as IBM closed above $204.
Thursday in Asia stocks fell 0.3% while in Europe they rose about the same amount. U.S. stocks rose 0.4% despite disappointing earnings news from Apple. APPL dropped over 2% to close at $450 per share. The S&P 500 Index rose above the 1500 level briefly before settling back down to one cent above the previous close. VXO fear moved up 5% to nearly 12.50. Asian stocks Friday fell just slightly and in Europe, they rose just slightly. The U.S. stock market was less restrained and downright euphoric with a 0.4% gain on low moderate volume as the S&P 500 Index broke through the 1500 level to close at 1502.96. Significantly, the 10-Year U.S. Treasury Bond rate jumped up over 5.5% to 1.95.