Why Is No One Talking About the Stock Market's All-Time High?

U.S. stock markets* are flirting with all-time highs (it may happen today) but I am hearing and reading very little about it. Why is that?

I can think of a few possible reasons, and am eager to hear yours.

1. After the spectacular meltdown of 2007-2009, a lot of people are generally gun-shy and/or inattentive.

2. Since so many people sold into the teeth of the meltdown, and stayed on the sidelines since, a new high is to them relatively bad news.

3. Because the economy itself is not quite roaring, a roaring stock market doesn’t seem legit (unless, of course, you consider it a leading indicator, which it usually is).

4. Just “getting back” to an all-time high from more than five years ago is, at best, a muted victory.

All that said, I remain surprised by the lack of chatter.

*The Dow and S&P 500, at least; the NASDAQ is still a very long way off its tech-bubble high.


Marc

Sequester has dominated the news and senses of most citizens.

Jim

I would argue that the lack of excitement in the current "strength" of the markets is driven largely by the weak fundamental performance of the companies underlying the stocks. While nominal values are at all time highs, this has been caused primarily by multiple expansion, with little underlying earnings growth. Thus the appreciation can be largely attributed to the huge increases in liquidity resulting from the Fed's balance sheet expansion.

Scott Sabol

I believe its from QE 1 thru where ever we are now. That has injected liquidity into the markets but with very little trickle down into the mainstream economy. Way too many people still trying to deleverage...lots of homes still underwater.

If employment were lower and GDP was higher, this would be bigger news

Thanks

Scott

Donald Pato

The Fed is purchasing 85 billion worth of assets every month. Interest rates are in a medically induced coma, and have violently forced savers and would-be-bond investors into the stock market. This is an artificial, centrally planned market rally. I'm not buying it.

It'll be interesting to see what happens when the Fed starts unwinding, which it has already begun to murmur about. I do not want to have money on the table for that roll of the dice.

I can't wait for the day when savers and retirees can earn an honest rate of interest on their money without being forced into risky investments at the barrel of a ZIRP policy bazooka.

Dave

Where have I heard $85 billion recently? Hrm... ;-)

Dan Fiore

With the stock market, the trade trade deficit and long-term unemployment all at all time highs I think the public is generally skeptical of positive news from Wall Street.

So I agree with your 3rd premise, but think there are other contributing factors beneath the skepticism of Wall Street success in a slow economy.

James

I think it's because an overwhelming majority of the people in the stock market are wealthy people. Your average joe, like myself, couldn't even dream of putting money at risk anymore. So all this says to me is that the wealthy keep spreading the gap between us. I like to think of myself as middle class, my salary says I am, but I am pretty broke.

It would be like caring about a sport without being able to watch the sport.

Eric

All this post says to me is that the gap is only widening because the average joes aren't investing very wisely.

James

Wish I had the disposable income to invest.

RandyB

I would lean towards the assumption that quantitative easing has allowed those who first come in contact with the money to enjoy the benefits that there of. Which could be an indicator of problems to come. During our last financial crash a large influx of fiat capital created a sandy foundation. If the capital was due to real industrial growth, exports, or a new job industry then I would be excited. All around me I see people struggling to make end meet. I enjoy playing the market and my financial investments have done great since I entered the market in 2010; but what will happen during this next boom?

"Financial markets have become stimulus junkies. They crave their next fix of quantitative easing and when they don't get it they turn ugly. The rush they get from the drug wears off after a while, and then they become needy and whiny. Witness last week's sell-off on Wall Street following the hint from the Federal Reserve that it was about to cut off the drug supply.

A similar dependency exists in the UK, where stock market traders expectantly await an injection of QE, courtesy of the Bank of England, after deterioration in the UK's economic outlook. Governor Sir Mervyn King voted for another £25bn of cheap money and his colleagues should endorse his view in the coming months. The loss of the UK's much coveted AAA status, thanks to the credit ratings agency Moody's on Friday night, is likely to make the markets salivate even more." - http://www.guardian.co.uk

We need to divulge ourselves of a currency so easily manipulated by private interests.

We are slaves to a currency. We as individuals have no representation outside of our buying habits. Our citizenry is too ignorant to the facts about how currency is created, flows or even borrowed to participate in a conversation to solve the problem. I believe the population assumes a smart guy like yourself will spell out the problems in elementary terms to allows them the ability to decipher a solution. However, the problem is so complicated it takes hours of schooling just to understand the basic principals behind the problems in the first place. The lack of chatter is no surprise, media is a game to be played on the stock market. Most news changes the buying habits of individuals and thus becomes an extraordinary tool for influence. There is no growth only inflation. The inflation will trickle down to the small guys and then the media will find a new straw man to knock down.

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Ron Nelson

any thoughts on http://dilbert.com/blog/entry/here_come_the_market_manipulators/ here?

Jill

I wondered about this myself. We keep seeing the darn thing go up and up and up and all anyone can talk about is the recession. Hello? Do you not see the stock market go up? Doesn't that generally lead to a better economy?

Impossibly Stupid

It used to. Now it leads to corporations moving profits to offshore accounts. It leads to companies (Apple, for example) that have *huge* cash reserves that they're not spending. Money is now leaving the economy via the stock market.

Craig

The conservative storyline for the last five years has been that Obama destroyed the American economy. Most financial outlets are conservative. They can't have it both ways, so they ignore or play down the stock market.

George

Since we haven't done anything about the underlying issues that led to the recession, I think folks are worried that these highs are just another fragile bubble rather than a promising leading sign.

Scott Cunningham

Because the US Stock Markets do not matter to the majority of Americans. Most Americans don't have a horse in that race.

I personally took all my money ($250k) out of the market over 12 months ago and invested it in depressed real estate - single family homes. I now have a tangible, hard asset that I rent for a significantly higher and more stable return than the wild swings that the market was providing.

Why did I do this:
1) Wall Street is corrupt. Clearly without question corrupt and unscrupulous. They always win at the expense of the little guy - Me.
2) The fed is giving banks money, the banks are buying stocks to shore up the price. Eventually the common man/woman will start buying stocks again and then the banks will sell and the stocks will tank. Another manipulative Wall Street "wealth transfer" from the common man to them via manipulated markets. Look at the money flow reports and this is clearly evident.
3) Politics don't stand a chance in standing up to the "street", or "corporations". The days of protecting the common person is over. The wealth is so concentrated at the top, that there is no need to even fein caring about the average person.

BTW - does anyone know where I can buy ammunition?? Everywhere I look it is SOLD OUT.

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Jim

Maybe you're not listening?

It was all over CNN this morning when the NYSE opened. They were doing play-by-play for at least as long as it took to hit 14,200. That's when I stopped watching.