Amidst the fanfare and euphoria of Wednesday’s post-taper rally, which took stocks to fresh new record highs, another more subtle change was taking place. Without saying it, Wall Street’s celebration marked the end of the insane bad-is-good era. Specifically, traders have finally embraced the fact that good news is actually just that.
“The taper is a good thing for the market. It’s based on good economic data and the Fed acknowledged that,” says Doug Cote, U.S. chief market strategist at ING Investment Management in the attached video. “There’s a lot of concern that maybe the rally has gone too far. It hasn’t.”
In fact, Cote says it’s time to buy stocks here and points to a forward P/E ratio that’s still below 15-times next year’s estimated earnings as proof that record highs do not always mean overpriced or expensive.
“Hesitant investors may have missed a good rally (yesterday) but it’s not too late to get in for 2014,” he says, pointing to areas that haven’t run up such as global