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Need to Know: The trap ahead for a stock market too full of animal spirits

A day after confidence data ripped to 16-year highs, taking stocks along for the ride, some are asking if investors have gotten a little too spirited away.

“Barely one day on, and we find ourselves on the opposite end of the spectrum, where traders are scrambling over each other to buy this dip,” observed Cracked Market’s Jani Ziedins in a blog post.

Tuesday marked the best bounce for the Dow DJIA, -0.28% and S&P 500 SPX, -0.22% since March 1 and March 15, respectively, sparking fresh talk of so-called animal spirits.

That brings us to our call of the day from JonesTradings’s chief market strategist Michael O’Rourke, who senses trouble in a disconnect between soft data (consumer confidence, PMIs) and the hard stuff (GDP inflation, jobless levels).

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