Biggest Drop in retail sales in 2 years and Market hits new highs. What are they high on?

Retail sales were down big-time, far below expectations. Oil continues to rise, and will soon be at 80 or more a barrel. Everyone knows the impact of sub prime mortgage problems will really hit the economy and take a significant bite out of it. AND this week, the markets made huge gains and reached new highs. Is there something wrong about this story?

Retail sales were down big-time, far below expectations.  Oil continues to rise, and will soon be at 80 or more a barrel.  Everyone knows the impact of sub prime mortgage problems will really hit the economy and take a significant bite out of it.  AND this week, the markets made huge gains and reached new highs.  Is there something wrong about this story?  

I wasn't around before the depression, but these kinds of disconnect feel very bad.  We are going on fumes here, and there is a giddiness that is very troubling.  I would be the last person to argue that those pulling the strings are particularly intelligent, but this seems to be a combination of 20 somethings pushing buttons and hedge fund managers making the rest of us twist and turn while they -- playing master puppeteers -- reap huge benefits at our expense. 

This is not a time for the small investor to be in the market.  I will bet next week that the market will go down as much as it went up this week.  The indicators -- retail sales, oil, and mortgages -- do not justify in any way the optimism that is so artificially taking hold of the market.

Don't be a fool.

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Comments

  • Anonymous

    July 15, 2007

    Market is going to go down big, but it isn't going to be next week. This euphoria will last through earnings and then we will be hit from left field by something.

  • Anonymous

    July 15, 2007

    Do you see Q2 SP500 earnings to disappoint then? Or is it just that employment rate is going to fall? what do you think will trigger? or Interest rate?

    http://creating-wealth.blogspot.com/

  • Anonymous

    July 16, 2007

    The global economy is strong and interest rates are still relatively low. Central banks are pumping liquidity into the markets. Baby boomers are socking away money at record rates. The prevailing winds are a go. The market will continue to go up.

  • Anonymous

    July 16, 2007

    Here's the article I was reading. I also posted it to the site:

    http://www.boston.com/business/articles/2007/07/15/a_bump_in_fuel_costs_and_a_slump_in_housing_cant_halt_market_climb/

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