There was a time not too long ago when the market would have a shit-fit at the mere hint of a rate hike. That was life then, when the Fed propped up stock prices and Obama gave beautiful speeches about American exceptionalism. But the real heroes of the Great Crash are Ben Bernanke and Janet Yellen. The S&P 500 under Bernanke’s tenure gained 37.2%. The S&P 500 under Yellen gained 37.6% (in half the time of that of Bernanke).
It was a fabulous time if you had the money to buy stocks. One record high after another! BUY THE FUCKING DIP (BTFD) became a meme in the financial web as traders took advantage of price declines to double down on their positions. They knew the Fed’s mandate was to protect equity markets no matter what. Indeed, quantitative easing got us to where we are today. And whether you believe in this recovery or not it is inconsequential. The market doesn’t care what you think.
U.S. stocks didn’t budge today because they are driven by a different set of assumptions. American businesses are making obscene amounts money and they are sitting on piles of cash. Deals are getting done everyday as companies try to outdo competitors. So as long as corporate profits continue to rise, nothing is going to stop this rally. Not even the political circus in DC.
At some point corporate profits will decline and some companies will disappoint investors, but that’s not a reason to be bearish right now. Your job is to untangle yourself from the bullshit emotions that rule most people because the market doesn’t care about your feelings.
Long: CVE, BLRX, TCEHY, NMR, CX, and CCJ