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Originally posted by Rockpuck
The ONLY thing an increase in the stock market indicates anymore is that... the market has increased. That's it.
Note the HYG junk bond ETF is making another new 10-month high today. I know many stock bears are looking for an imminent retest of the stock market’s lows, but if corporate spreads, especially junk, keep coming in like this, it’s difficult to see how that’s going to happen anytime soon since the credit markets typically lead the equity market.
Clearly neither corporate debt or stocks are rising because the economy and financial system have been magically cured by money-printing. But when the Fed prints enough money to make literally everything “money good” when it comes to their value in debased dollars, everything can rise for some time. Let’s not forget that stocks tend to do quite well during hyperinflations; it’s just that gold, hard assets, and claims on hard assets do even better.