The Dow today gained a whopping 3 points to close at 18,533 on slightly higher trading volume. The NASDAQ also moved higher and set a record high.
Investor’s Business Daily or IBD, released its latest, three component, Economic Optimism Index and the reading for early August showed a sharp rebound with two of the three components showing solid gains. The overall Economic Optimism Index rose to a reading of 48.4 which is the highest reading in 14 months. Contained within the index, the personal financial outlook stood at 58 up from 57.2 while the “federal policies component” fell from 42.7 to 42.5. Does this mean that people are making more money but afraid the gubment will take a bigger part of it?
There seems to be a disconnect between the markets being at high levels while so many gurus are calling for a pullback. Could the disconnect between optimism behind the scenes and market headline pessimism on CNBC, etc., stem from the possibility that most market commentators are of baby boomer age while the younger millennial “gurus” do not have the headline recognition or are heard mostly in the nontraditional media circles? A case in point is that CNBC had guru Marc Faber (age 68) on today and he was saying the markets are set to correct 50%. Meanwhile youngsters like Zuckerberg, Bezos and Musk, who are not market commentators but are the only young guys I can think of, are busting up traditional ways of doing things. This would be an interesting thing to study to see if it holds water.
Earnings reports in Europe are coming in a bit better than expected. Of the companies that have reported so far 61% are in line or have beaten expectations according to Reuters. By way of comparison, S&P says that 70% of US companies have beaten estimates which is above average but not great considering earnings estimates have been lowered.