A 26,000 high is unsustainable. We’ve been tempting a correction for awhile. QED dollars are easy and cheap, fueling riskier and riskier bets by investors. Signs of inflation have been popping up for months, but investors looked the other way to ride the gravy train. Now, wages have surged, bond yields are rising and commodity prices are starting to climb - and finally the investment class took notice. Probably because the easy money may start drying up.
Overall economy remains strong, with consumer and business confidence high and corporate earnings setting records. Housing bubble hints at need for small rate hike, but the market is finding its equilibrium.
Good post.
I’ll go out on a limb and say we’ll be back to 26 thousand by mid-year.