The current economic policies being pursued will likely result in the realization of Thomas Jefferson’s warning to us more than 200 years ago.
Massive new money creation being distributed as helicopter money to the masses is creating a banana republic look in the United States.
When looking at the economy and the markets, the current climate is just flat-out nonsensical.
When looking at the financial and economic news and attempting to find one word to describe what I am observing - surreal is the word that comes to mind.
The very extended markets became more extended last week. The Dow advanced nearly 2% and the S&P 500 rallied 2.71%. Gold, silver, and US Treasuries also rallied although the US Treasury rally was not significant.
“It was self-serving politicians who convinced recent generations of Americans that we could all stand in a circle with our hands in each other’s pockets and somehow get rich.”
-Paul Harvey
Stocks remain in an uptrend although the NASDAQ and emerging market stocks gave us a bearish signal this month. Short-term bear market trends in US Treasuries, gold, and the volatility index are extended meaning a reversal in these trends could occur at any time.
Good news for procrastinators last week from the Internal Revenue Service. You now have an extra month to get your taxes filed. The US Department of the Treasury and the IRS have extended the filing deadline until May 17.
Stocks had another big rally week. The major indices have now gained nearly 6% over the past two weeks. A pullback in price after such a big up move would be typical.
To sum up last week’s market action in a word, markets were absolutely ‘crazy’ last week.