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Friends

Stocks will never go down again, ever. Ok, I am just kidding, of course, but as market participants (portfolio managers, pension funds, individuals etc.) sit around “waiting for the next explosion” (a nod to Jimmy Buffett), stocks continue to climb “higher and higher” (a nod to Jackie Wilson). If you consider the laundry list of things that have been thrown at this market over the past few years (European crises, China slowdown, collapses in emerging markets, fiscal cliffs, government shutdowns, sequester, debt crises, Cyprus, North Korean saber rattling, bankruptcy in Detroit, and never ending war and political strife in the Middle East to name just a few) this is a market that indeed they have “tried to stab it with their steely knives but they just can’t kill the beast” (a nod to The Eagles).

Alright, no more musical references, but the fact is, stocks have been gaining ground for years now in the face of what would seem to be impossible circumstances. If I told you all these things were going to happen in advance, I am quite sure you would have been happy to be hiding out in cash while all this unfolded. Of course, we know now that stocks have climbed this “wall of worry” in amazing fashion. Yes, we will have a correction/bear market again someday, and that may be sooner than later. Nevertheless, this has been an amazing run for stocks and for many, a very frustrating one. Many hedge funds and other market pros have been fighting this advance the entire time. Indeed, this might be the most unloved “bull market” of all time.

As for today, the Dow Jones Industrial Average was up 26 points to close at 16,947. The S&P 500 was up 3 points to finish the day at 1962. Gold was up $1.70 to trade at $1315 per ounce, while oil was up $.83 to trade at $107.26 per barrel WTI.

Of course, all that we have mentioned above can be explained rather easily, can’t it? Don’t fight the Fed. We said it back in December of 2008 when Dr. Bernanke first indicated that the bazookas where coming out. By keeping rates low and money flowing, the Fed and other central banks around the world have forced savers (individual and institutional) into risk assets. Of course, we continue to ask ourselves-what happens when the Fed and other central banks change course on monetary policy?

Have a great weekend everyone.

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