Posted on 01/02/2020 1:20:44 PM PST by SeekAndFind
Stocks are lurching toward fresh records to commence the first trading day in 2020, but that advance has raised some questions about the run-up in values for broad-market U.S. equity benchmarks.
Indeed, the S&P 500’s recent gains have taken it to its priciest level relative to its hourly cost for the average worker on record.
By that measure, Tuesday’s climb by the S&P 500 SPX, +0.84% to a peak at 3,250.04 would mean that the average employee, at an hourly wage of $28.29, would need to work 114.88 hours to buy a single unit of the index, representing one of the loftiest levels on record, according to data from FactSet and the U.S. Bureau of Labor Statistics.
Data from the Federal Reserve Bank of St. Louis estimates that the average worker needed to work a record 109.75 hours, based on its most recent employment data, as of Dec. 6 (see chart below):
A tweet by financial commentator Holger Zschaepitz, using the New Year’s Eve closing price for the S&P 500 at 3,230.78 and an hourly wage of about $25.71, drew more than 630 likes on Twitter as of midday Thursday, highlighting a record number of hours of 125.6392 for a share of the S&P 500.
(Excerpt) Read more at marketwatch.com ...
US yield curve signals optimism for 2020
https://www.bizjournals.com/atlanta/news/2019/12/31/us-yield-curve-signals-optimism-for-2020.html
Colby Smith in New York – Financial Times Dec 31, 2019,
A US bond market indicator which signalled earlier this year that a recession could be imminent is closing 2019 at its most optimistic in more than a year, suggesting that the Federal Reserve has successfully steered the economy through a global growth scare. end quote.
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The market and yield curve dipped due to the Fed’s Jerome thinking aloud (or not thinking). There was no technical reason for either. So now the Financial Times writer gives the credit to the Fed rather than the American consumer or investor, or Trump.
< The FED has successfully steered the economy > Fake new.
My problem is I just don't know what's a good change up right now. Interest rates are still staggeringly low. If they go anywhere it will go up which will devalue bonds, so where are you going to go to keep up with inflation?
I'd love to hear what you think is a good place to be "less aggressive" and still be able to handle a correction.
Good thinking.
Remember:
Bulls make money
Bears make money
Pigs get slaughtered.
Fraud in the swamp? In government employees and contractors?
Fraud where? Why should fraud be any more in 2020 than in 2019 or 2009 or 1920?
Do Social Security recipients get advances or raises when economy does well?
The markets have returned an average of just under 9% annually as far back as records are kept. The markets also advance on average 2 days out of every 3.
Never invest any cash you will need in the next 5 yrs, invest on a regular basis, reinvest all dividends and distributions, re balance as needed and sit back while the magic of compounding makes you very comfortable if not down right rich.
“Why should fraud be any more in 2020 than in 2019 or 2009 or 1920?”
Didn’t have orange man poised to undo their carefully constructed corrupt court system backon those dates Nobody, poised such an existential threat to their free taxpayer money fountain, nor their nepotism and crony capitalism. By Any Means Necessary isn’t just a clever name it is law and covenant
Ever notice how when the dollar collapses they repackage it as a “record high equity and real estate market” and declare victory? :)
“I’d love to hear what you think is a good place to be “less aggressive” and still be able to handle a correction.”
Treasuries with staggered maturities up to 5 yrs will offer excellent protection against a correction. Bond prices typically rise when equities sell off and US Treasuries have long been a place of safety for the worlds investors during rocky times.
Market should go lot higher because the FED’s must print a lot of money to cover the Trillion+ dollar deficits every year. The cheaper the $$ higher the stock market!
All that statistics means is only 10% of the population is brainy.
They're trying to convince Americans that the economy is in trouble despite everything out in the real world telling them different.
They know that if Americans are not feeling positive about the economy, they won't re-elect Trump.
It's massive gaslighting.
I'm still 10 years away from when I want to retire which will be the SSA FRA age for my bracket (67). I was at 60/40 when Trump got elected and made it 70/30 just before his inauguration.
It was a very nice three years. Now I don't want to push my luck!
The best personal finance/market website in existence today. No matter the question, you’ll get an answer from someone who has had prior experience.
https://www.bogleheads.org/forum/index.php
Thanks, I’m bookmarking that one.
Same here.
Doesn't seem like that much, though.
When I was a kid, a 1969 Z/28, loaded, was about $5500. I was about $5400 short.
Just shows how bad the Dollar has been screwed over in the intervening years.
What horrible news. If stocks were cheaper, people could buy more of them.
We are retired and have a higher than recommended allocation in equities because fixed income returns are below zero after inflation. We pray this keeps up and we don’t wake one morning having taken a disastrous bath.
A more important split is how much is owned by institutional money managers vs owned by individuals. In Aug 2017: “Institutions own about 78% of the market value of the U.S. broad-market Russell 3000 index, and 80% of the large-cap S&P 500 index. In dollars, that is about $21.7 trillion and $18 trillion, respectively.“
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