If someone didn’t know any better, he or she would think the market crashed last week. Those last two sessions of the week sure felt like a crash. The fact is that the year has been a tough one; last week, even super-hot stocks took it on the chin.
Tough Sledding Continues
Breadth |
52 Week High |
52 Week Lows |
NYSE |
19 |
224 |
NASDAQ |
32 |
136 |
There’s still a lot of confusion, and that alone is a reason for stocks to move lower. However, beyond the emotional angst of Wall Street, what’s the deal with the market?
The deal is now the game has changed. The economic data has to show growth with no inflation, which is a conundrum, but not the oxymoronic circumstance that used to be impossible. In the global economy where America hasn’t been the driver of growth, can we ignite the wheels of commerce to the point where we once again carry the world?
It’s not likely. What’s going to happen in China and the rest of the world matters as their economies aren’t going to erupt anytime soon. So, there will be no inflation-can we get sustainable growth without other nations selling our stuff?
I think we can, but not for an extended period. Somehow, the dollar has to get weaker to tilt the equation for multinational companies and a sustained leg higher for stocks.
Leadership
The stock market has been led by a dozen names and they are waffling a little.
I think the market reflects a lot of things, including a lack of leadership in not just those publicly traded names, but throughout the nation as well. The would-be leadership starts at the top. The tone-deaf president, by-the-numbers politicians, and endless stories of Wall Street corruption all play a role, but the “Bully Pulpit” has so much power to inspire.
Obama once said that words matter. If he would be proud of the nation and its accomplishments, tell us there are even greater days ahead, it could become self-fulfilling. Instead, we hear about how bad this country is, and how social justice and righting the wrongs of yesteryear matter most. Meanwhile, Congress is partying like it’s 1999. Last week, that spending bill was a disgrace.
Moreover, there’s the issue of safety. Terrorism is the important issue for voters and few feel that our federal government is doing enough. This can only get better as time goes by without an event and most important, until we decide to crush the purveyors of terror in the Middle East.
Many say the market likes to climb the walls of worry – well, this is a mountain of worries.
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