It is an old Wall Street expression that bull markets "climb a wall of worry"; that is, markets often rise when pessimism is rampant.
If that's the case, then perhaps we're in for an explosive second quarter rally, judging at least from what is being written in the financial press.
Here's just a sample of a few of the articles have been published over the last couple of days:
Headlines from this morning's Wall Street Journal:
Wake-Up Call for U.S. Stocks
Lackluster Profits For First Quarter May Rattle Shares
From yesterday's special "Mutual Funds Report" section in the New York Times:
Wary of Heights (and the Future)
SEEING is supposed to be believing, but a second consecutive quarter of
eye-popping gains for stocks has left many investors still unconvinced
that the long-term trend is up.
The Standard & Poor’s 500-stock index rose 12 percent in the first
quarter, after gaining 11.2 percent in the one before, yet the panic
that was palpable last fall seems to have given way to doubt, more than
to euphoria or even hope.
From yesterday's Financial Times:
Investors braced for fall in US profits
The start of the first-quarter earnings reporting season this week is
set to challenge the US equity market, with analysts predicting that
profits will fall in most sectors.
And then from the online magazine Slate:
Time To Panic About Europe Again
I could go one, but I hope you get the idea.
I like the way that economist Ed Yardeni characterized the current market in yesterday's "Mutual Fund" section in the Times:
“This is the Rodney Dangerfield of bull markets,” said Ed Yardeni, president of Yardeni Research. “It doesn’t get any respect. The naysayers have been badmouthing it really since the start.”
Skeptical investment advisers
find much to say nay about; they question that a bona fide recovery is
in place or that the last disruptive piece of news has come out of
Europe.
Others, including Mr. Yardeni, are skeptical about the skepticism.
“There have been numerous nearly apocalyptic scenarios out there that
haven’t played out,” he said. “Despite the scares we’ve had, the global
economy continues to grow. The adage about the market climbing a wall of
worry has never been more relevant.”
And, oh that "bad" jobs report last Friday?
Jobs growth over the past three months has averaged +212,000 per month, which would have been considered quite respectable just a few quarters ago.
And, as Ned Davis Research noted this morning:
The number of people working full-time rose by 882,000,
the most since April 2000 when the unemployment rate was 3.8%! That drove its unemployment rate down to 8.6%, the lowest since January 2009 .
The problem was that most Wall Street economists were expecting job growth in March to be above +200,000, so the employment report was considered "poor".
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