If You Own the S&P 500, You’re Betting on These Three Outcomes… Whether You Know It or Not
So… why did the S&P return from its barbecuing and parade-watching on Memorial Day to surge to another new all-time high?
Street economists credited it to the increase in durable-goods orders:
- but that’s a hoary answer exhumed to cover up economists’ shared inability to explain the stock market’s idiosyncrasies on a day devoid of big news;
- durable-goods orders are lumpy and notoriously subject to massive restatements, so they almost never produce a widespread lust to buy stocks.
Other answers are equally unsatisfying:
- it’s not as if a 3-day weekend was enough time for investors to plow through all the bulky weekend papers to find reasons to rush into stocks;
- and it’s getting tiresome to hear the argument that 0 returns on cash and piddling returns on Treasuries render stocks the default option. Everybody already knows that.
So why the high?
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