By Christopher Versace via Iris.xyz
Stocks continue to be on a tear while the dollar just experienced its fifth straight week of declines against a broad range of currencies, hitting a 3-year low against the euro. Make America Great Again (better known as MAGA) isn’t doing much for the greenback! The bulls are fully in charge when it comes to stock indices, making new high after new high with most every country ETF, outside of Mexico, in overbought territory in a rally that looks to us to be blissfully ignoring what it doesn’t like and seeing only what it does. Begs the question how long can this last?
The bulls cheered the news that Walmart (WMT) is going to raise wages, provide bonuses and expand maternity and family benefits while utterly ignoring the fact that it rather abruptly announced it will be closing 63 Sam’s Club stores. That news, by the way, bumped shares of Cash-Strapped Consumer investment theme company Costco Wholesale (COST) up over 3% this week.
December’s Bank of America Merrill Lynch survey of global portfolio managers found that 45% of respondents believe the equity market is overvalued, the highest level in the 20-plus year history of the poll. Yet, a net 48% are more exposed than normal to the stock market as FOMO (Fear Of Missing Out) and TINA (There Is No Alternative since most think bonds are also overpriced) conspire to keep stocks moving higher.
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