The stock market is still up after it slipped a bit last week and there are strong forecasts for third-quarter GDP yet the so-called bubble crowd does still seem to find a problem with the economy. The truth is that a little bit of softness in the stock market doesn’t have to be alarming with a few good reasons why.
Economic and corporate reports are good, it’s just that the bubble talk refuses to look at the facts like the unemployment rate which has gone down to 6.1%, the lowest ever since 2008. Many bubble believers are saying this isn’t an actual figure, they find that the percentage only represents the people that leave work and get unemployed for the time-being.
Valuations are fair which would be observed if you would look beyond the broad sentiment and macro data. Among the bubble crowd, it’s very common for stocks to be extremely overvalued but a closer look at the data will show that it’s not really the case. The ratio of S&P 500 price-to-earning is around 16.8 which are relative to the years that have gone by with select periods yet well lower than the 15-year average as the FacSet market research data shows.
Rainy days don’t mean that the sun won’t shine ever again but they promise that the sun will be back shortly after. It’s best to stop being stubborn and get a clear picture of what’s really happening. Instead of waiting for the perfect time to say ‘I told you so.’, it might be best to just take things positively and do things that will help the economy.