Shortly after yesterday's disappointing jobs report was released, the S&P 500 (^GSPC) opened and hit all time highs. It was yet another disconnect between the fundamental realities of the economy and a stock market seemingly determined to make new highs day after day.
The moment nicely captures a President whose administration has been largely defined by alternately ignoring and boasting about the performance of stocks depending on how the mood and markets suit him. In the wake of yet another torturous debt ceiling debate it's becoming impossible to ignore the connection between a lack of fiscal control in the White House and the ageless bull market.
"It does sort of smack of a 'Mission Accomplished' moment for the Obama presidency with the market at all-time highs, cats and dogs hugging in the street. Everybody has seemingly bought into the fact that the Bernanke call has replaced the Greenspan put and the market trades fantastic," says Todd Harrison, founder & CEO Minyanville Media, neatly summing up the strange marriage of weak fundamentals and roaring stocks.
President Obama's terms have neatly coincided with unprecedented fiscal stimulus led by FOMC Chairman Ben Bernanke. With the Federal Reserve pumping out stock market investors win regardless of the economic situation. Paradoxically bad news is good, provided it leads to more QE.
As Bernanke's like-minded dove Janet Yellen gets ready to take over the Fed it's no wonder the stock market isn't ignoring weak corporate fundamentals. The stock market is rallying because of the weak economy. Stocks are selfish. When other assets fail stocks go higher. Equities are the only place to hide in this economy.Read More »from Weak Economy Driving Stocks to Record Highs: Harrison