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Here's why stocks could keep hitting new highs
CNBC ^ | 07/17/2014 | Patti Domm

Posted on 07/17/2014 6:46:14 AM PDT by SeekAndFind

Bears may be making the most noise on Wall Street, but bulls expect to see stocks stay on a record-setting course this summer, fueled in part by a surge in merger activity.

Despite calls for a big correction, the S&P 500 and Dow have persisted in making gains, with major indices up more than a percent this month so far. The Dow closed at 17,138, a new high, Wednesday. The S&P 500 trended higher to 1,981, four points below its all-time high.

[SNIP]

Stocks could continue to benefit from low rates and easy Fed policy into next year, and the market should also be bolstered by steady earnings growth in an improving economy, analysts say. But some investors, like Stanley Druckenmiller and Carl Icahn, said they worry about the potential side effects of too much Fed easing. Both made comments on their concerns at the CNBC and Institutional Investor Delivering Alpha conference Wednesday.

But some analysts say the Fed's easy ways should keep stocks heading higher for now.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Society
KEYWORDS: stockmarket; stocks

1 posted on 07/17/2014 6:46:14 AM PDT by SeekAndFind
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To: SeekAndFind

2 posted on 07/17/2014 6:50:18 AM PDT by Paine in the Neck (Socialism consumes EVERYTHING)
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To: SeekAndFind

Amazing how they’ve managed to make the stock market so detached from reality.

I majored in finance and most everything we learned in the text books are a waste of time. The formulas we used to arrive at things like intrinsic value are pretty meaningless now.

There may be a day when we go back to fundamentals. If so, reality will be a hard one.


3 posted on 07/17/2014 6:57:32 AM PDT by boycott
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To: boycott

RE: The formulas we used to arrive at things like intrinsic value are pretty meaningless now.

Did your course take into consider money printing by the Fed and record low interest rates?


4 posted on 07/17/2014 6:58:30 AM PDT by SeekAndFind
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To: SeekAndFind

What is happening very simply, is that America is giving China a huge amount of money, but China doesn’t allow for investment except by Chinese.

So a lot of global money is investing in America.

That is good short-term.

Longer term however, America needs to build, to grow, and to stop giving China the future.

Rebuild AMERICA.


5 posted on 07/17/2014 7:01:31 AM PDT by Cringing Negativism Network (http://www.census.gov/foreign-trade/balance/c5700.html#2013)
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To: SeekAndFind

Did your course take into consider money printing by the Fed and record low interest rates?


Not in the insane manner we see it now.


6 posted on 07/17/2014 7:03:59 AM PDT by boycott
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To: boycott

7 posted on 07/17/2014 7:04:04 AM PDT by ErnBatavia (It ain't a "hashtag"....it's a damn pound sign, number sign, or octothorpe. ###)
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To: SeekAndFind

Biggest reasons? Huge potential upside in housing (still 50% upside to “normal”), significant slack in the labor market (NFP growth just started to accelerate), capacity utilization rates still relatively low, finally S&P valuation not overvalued relative to corporate profits.


8 posted on 07/17/2014 7:10:00 AM PDT by Wyatt's Torch
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To: ErnBatavia

I feel like I keep putting my 401 into one of those things. I am getting a little concerned.


9 posted on 07/17/2014 7:10:15 AM PDT by boycott
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To: boycott
We've been "all cash" for years now....inflation eats into the value quite a bit more than the 1/2% we earn, but it beats the sh*t out of the potential huge losses.

When I was managing my now-dead parents' Schwab account (they both had dementia) - which was mostly stocks - I got sick and tired of the monthly swings - up $4000 one month, down $7000 the next - that I put it all into Schwab's cash accounts...just a month or two before the meltdown.....not only did I begin sleeping better, but I probably saved the estate two or three hundred thousand bucks.

10 posted on 07/17/2014 7:18:14 AM PDT by ErnBatavia (It ain't a "hashtag"....it's a damn pound sign, number sign, or octothorpe. ###)
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To: ErnBatavia

The Mineral Portfolio of funds and shares has been doing very well the past three to four years. The only cash has been in the local bank account. It takes a measure of emotional detachment to tolerate the wild swings that happen, but as long as things on the whole are moving in the right direction I can stomach it.

On the other hand, Senior Mineral absolutely cannot tolerate the idea of a decline in value. Therefore he sticks with CDs and complains about the microscopic returns. Maternal Mineral is the same way. I tell them to junk the CDs, but they will not listen.


11 posted on 07/17/2014 7:31:50 AM PDT by AceMineral (Some people are slaves of their own stupidity.)
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To: SeekAndFind

Stocks will be worth lots of dollars.

The dollars themselves will be worthless.

There are ways to preserve your wealth, I use one of the best as my screen name here.


12 posted on 07/17/2014 7:34:46 AM PDT by Junk Silver
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To: Junk Silver

RE: , I use one of the best as my screen name here.

Why hasn’t the white metal budged at all?

A few years ago it reached close to $50/ounce and it’s now stuck in the $20 range.


13 posted on 07/17/2014 7:37:35 AM PDT by SeekAndFind
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To: Junk Silver

The metals have different uses. You said “preserve your wealth”. That CAN be done with silver, but is more effective in gold.

Silver’s use is in its divisibility as a currency when fiat currency is worthless. Silver is for preserving your spending power, gold is for preserving your wealth.


14 posted on 07/17/2014 7:40:00 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: ErnBatavia

We’ve been “all cash” for years now....inflation eats into the value quite a bit more than the 1/2% we earn, but it beats the sh*t out of the potential huge losses.
When I was managing my now-dead parents’ Schwab account (they both had dementia) - which was mostly stocks - I got sick and tired of the monthly swings - up $4000 one month, down $7000 the next - that I put it all into Schwab’s cash accounts...just a month or two before the meltdown.....not only did I begin sleeping better, but I probably saved the estate two or three hundred thousand bucks.


Good deal. I need to get off the roller coaster.


15 posted on 07/17/2014 7:45:49 AM PDT by boycott
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To: boycott

“Why hasn’t the white metal budged at all? A few years ago it reached close to $50/ounce and it’s now stuck in the $20 range.”

I claim no special knowledge of investing or finance. Personally I believe that silver is currently staying at around $20 due to Divine Providence allowing us just a little more time to get ready.

If you’re looking to make a quick profit, buying a $1000 face value junk silver bag for $16K might not be the best strategy. On the other hand if you perceive the great danger our entire financial system is in and are concerned about the dollar being massively devalued, I don’t think you can go wrong with 90% silver coins.

In the early 1960s a quarter would buy a gallon of gas. That same pre-1965 quarter will still buy a gallon of gas, and I believe it will do so for the foreseeable future.


16 posted on 07/17/2014 8:06:09 AM PDT by Junk Silver
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To: Junk Silver

I agree with you. I believe silver is a better investment than gold. That said, I have no special knowledge of investing either.


17 posted on 07/17/2014 8:10:05 AM PDT by boycott
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To: boycott

The Fed, its Wall Street owners and the US Government seem to be on a mindless spree to destroy the US Dollar as the world’s reserve currency.

Having such has allowed every progressive scheme imaginable to be funded. It also why Conservatives are constantly on their heels when battling big government and the progressives within it - they have the power of printed money behind them.


18 posted on 07/17/2014 8:12:49 AM PDT by PGR88
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To: PGR88

The Fed, its Wall Street owners and the US Government seem to be on a mindless spree to destroy the US Dollar as the world’s reserve currency.

Having such has allowed every progressive scheme imaginable to be funded. It also why Conservatives are constantly on their heels when battling big government and the progressives within it - they have the power of printed money behind them.


You’re absolutely correct. The printing of more and more money is like cocaine to addicts. A lot of people cannot say no to this feel good delusion? Sooner or later, there’s going to be a serious meltdown.


19 posted on 07/17/2014 8:17:15 AM PDT by boycott
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To: boycott

If I had several million dollars that I wanted to be able to preserve regardless of what might befall our country I would certainly look at Gold, or possibly Palladium. Frankly I don’t know where I could safely store millions of dollars worth of silver coins. Anyone who trusts banks as a safe haven for their money isn’t paying attention.

One of the great things about pre-1965 US coins is that you don’t need to have a lot of money to invest in them. For $100 you should be able to acquire 20 -25 silver quarters. I think every bug-out bag should have at least that.


20 posted on 07/17/2014 8:17:55 AM PDT by Junk Silver
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To: Junk Silver

It makes sense that if you believe the dollar is becoming devalued.... holding on to them isn’t very bright. You have to own what will create more of them. Property, stocks, silver.... something. Just putting everything in cash is a method called “fearful investing”. Fear never wins anything.


21 posted on 07/17/2014 8:23:02 AM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
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To: Junk Silver

I believe the dollar will more like monopoly money in the not too distant future.

May as well have something that we know will have value.


22 posted on 07/17/2014 8:26:31 AM PDT by boycott
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To: Junk Silver

By hard assets. Rental property etc. Rent always goes up. Bonds (corporate or government) have to much risk. All you have is a bureaucrat’s word that he’ll give you your money back someday. With municipalities declaring bankruptcy who wants to own bonds? They pay almost nothing and now they’re not even safe? Gold and silver maybe. You can’t beat owning property. That’s just my humble opinion.


23 posted on 07/17/2014 8:26:44 AM PDT by kjam22 (my music video "If My People" at https://www.youtube.com/watch?v=74b20RjILy4)
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To: boycott

“The printing of more and more money is like cocaine to addicts.”

The main thing that has allowed America to live so far above its means for all these years has been the use of the dollar as a global reserve currency. Our military strength and influence has also helped here. Consider Saudi Arabia selling us oil for dollars in return for our protecting their royal family.

The fact that international transactions are settled in US dollars has effectively allowed us to export what would have been hyper-inflation by purchasing goods and resources with increasingly diluted currency.

Nothing (of this world anyway) lasts forever.


24 posted on 07/17/2014 8:28:55 AM PDT by Junk Silver
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To: Junk Silver

Nothing (of this world anyway) lasts forever.


So true.


25 posted on 07/17/2014 8:37:25 AM PDT by boycott
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To: boycott

Finance major here as well. Nothing looks like what I was taught. These are indeed different days. Like everything, there is a level of corruption and manipulation in the markets now. I’m still in, but just barely. Got skinned hard in the tech bust thinking maybe the old valuation rules don’t apply anymore. Won’t make that mistake again.


26 posted on 07/17/2014 8:44:54 AM PDT by Comment Not Approved (When bureaucrats outlaw hunting, outlaws will hunt bureaucrats.)
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To: AceMineral
cannot tolerate the idea of a decline in value

If the return on the CD is a couple of tenths of a percent, and inflation is at 3% ..... then the CD's are losing money at a pretty good clip.

That being said, I have CD's, too. But they're for short-term emergencies, not long term investments.

27 posted on 07/17/2014 8:57:23 AM PDT by wbill
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To: Comment Not Approved

Got skinned hard in the tech bust thinking maybe the old valuation rules don’t apply anymore. Won’t make that mistake again.


I believe investors in companies like Tweeter and Facebook may learn of those rules in the not too distant future.


28 posted on 07/17/2014 9:03:30 AM PDT by boycott
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To: ErnBatavia

The image should say “Goldman Sachs” instead of Las Vegas.
In Las Vegas you have a chance to win some money....


29 posted on 07/17/2014 9:30:59 AM PDT by minnesota_bound
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