There Is Something Wrong With This Picture
The market is still holding onto gains sourced from ECB President Mario Draghi comments. But how long can the SP500 divergence from the real economy last.
Source:
Draghi
Says ECB Will Do What's Needed to Preserve Euro: Economy
ECB Draghi comments.
Extract..
European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the euro, suggesting they may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc.
"To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate," Draghi said in a speech at the Global Investment Conference in London today. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," he said, adding: "believe me, it will be enough."
This chart suggests that a 10% stock market correction would not be a surprise. What is a sure thing is either the Dow Jones Transports trucking and freight stocks are wrong on the US Economy or the SP500 is wrong. It wont be long before these stocks meet up again.
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