Posted 1/23/2024, 12:27:00 PM
Stock Market Hits Highs Despite Economic Concerns of Average Americans
- Stock market hitting all-time highs despite weak consumer confidence and economic concerns of average Americans
- Market rally driven by Fed policy and investor "Pavlovian" conditioning to respond to liquidity, not fundamentals
- Rally very narrow, dominated by tech/mega-caps; divergence from equal-weighted S&P 500
- Risks remain elevated with high valuations, declining earnings estimates; recession could spark repricing
- Narrow breakpoint rallies fine until change occurs, then risks materialize rapidly