“Some see the glass as half-empty, some see the glass as half-full.
I see the glass as too big.” George Carlin (Brain Droppings)
The George Carlin quote is apt for today’s variances from yesterday’s close as the market grapples with its view of the world economy: at the beginning of the day it was half-empty, down 1.04% (price of oil falling); by mid-day it was half-full, up 0.6% (Deutsche bank considering buying back Euros); and, at closing it was too big, down 0.2%(negative interest rates in the U.S. a possibility).
The market is finally seeing what I’ve seen and called for some time: the world economy is ill and the current stock market is overvalued and has not accounted for poor earnings in Q3 and Q4 of 2016. China’s economy has been slowing for some time, the U.S. economy-which is 2/3 based on consumer spending- is shambling along, and U.S. companies are producing products based on sales that will not be there given the lack of disposable income by the consumer and uncertainty in the economy-which is ironic as the unemployment rate is 4.9%.
I expect the market to bounce along as it magnifies each sliver of good news and comes back to reality with each spoonful of bad news.