The S&P 500 has been on a tear since the Fed first started floating the idea of quantitative easing 2.0. Since August 31, the S&P is up more than 11%. The gains are of course nice to see, but the rally is a phony. Stock prices are not rising on improving fundamentals or cheap valuations. Stocks are rising simply because investors are anticipating that the Fed will print more money. For proof that the rally is a phony take a look at the performance of the S&P 500 in terms of a hard currency such as the Swiss Franc. My chart shows that in Swiss franc terms, the S&P 500 still hasn’t breached its early August high. The Fed is debasing the value of the USD and creating illusory stock market gains.
Latest posts by Jeremy Jones, CFA (see all)
- The Highest Yielding Dow Stocks - November 15, 2019
- Apple Market Cap Eclipses Entire S&P 500 Energy Sector - November 15, 2019
- What is the Best Gold ETF for Investing and Trading? - November 14, 2019