Commmentary for the week ending 12-5-14

Yet again, another week with stocks pushing into record territory.  For the week, the Dow gained 0.7%, the S&P rose 0.4% and the Nasdaq was slightly lower by 0.2%.  Gold posted a decent gain of 1.3%.  Oil has seen tremendous losses recently, which is great for gas prices, closing the week down 0.5% to a five-year low of $76.51 per barrel.  The international Brent oil, used for much of our gas here in the East, was also lower

Source: Google Finance

We don’t have the time to do a full, proper market commentary this week.  However, that gives us the opportunity to show in pictures what we believe is presently having the most impact on the stock market. 

Below you will see charts of various economic metrics that at one time moved in tandem with the stock market.  As they improved, the market improved, and vice-versa.  That link had been broken over the last several years.   Yet one chart shows a remarkable correlation to the stock market.  Take a look:

 

Finally, the one chart that shows a strong correlation to the stock market:

 

As the central bank prints money and grows its balance sheet, that money flows into the stock market.  Further, this chart only shows our central bank.  Other banks around the globe are printing money at even faster rates, openly buying stocks and stock derivatives and pushing stocks higher.

We believe this is a horrible economic policy and aren’t sure how long markets can grow on printed money, but they may continue to do well with these conditions.

This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.