Stocks are starting the week near all-time highs despite an earnings season that has been filled with revenue misses.
“The reality is that investors are only enamored with what the Fed and other central banks are doing. They’re shoveling money out the door,” says Gary Shilling, president of A. Shilling & Co., an economic consulting firm. Investors, in turn, have adopted a “don’t fight the Fed," attitude Shilling tells The Daily Ticker.
What that approach is missing, says Shilling, is an understanding of what the economies in the U.S. and overseas are doing, which isn’t much.
The U.S economy grew at a 2.5% in the first quarter-- well below expectations of 3.2% growth though much better than the 0.4% reported for the fourth quarter. “Europe is in recession, Japan is barely growing and China is slowing,” says Shilling.
Related: Long-Term Bear Sees One Economic Bright Spot: Jobs
This gap—what Shilling calls the “great disconnect”--between a strong stock market and a weak global economy
Read More »from Gary Shilling: The Disconnect Between Weak Economies and Strong Markets Won’t Continue