Stock Prices vs. Durable Goods Orders: Disconnected

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Published : September 28th, 2012
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Category : Crisis Watch

 

 

 

 

Over the past two decades, whenever the year-on-year trend of durable goods new orders has been falling and subsequently drops below -5%, stock prices have generally followed suit -- except recently.




One reason why things are different this time, of course, is the Fed's program of quantitative easing, which is helping to keep stock prices propped up despite a deteriorating fundamental outlook.


Looked at another way, the current Wall Street-Main Street disconnect could be seen as further proof that, for all the Fed's claims to the contrary, its policies are doing little or nothing for the real economy.


The insanity continues.


Michael J. Panzner 



 




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Michael J. Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, published by Kaplan Publishing.
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