Decoupling the Stock Market from the Economy
The stock market may be poised to rally through the end of the year. Individual investors and fund managers are so paralyzed by the fear of a collapsing Euro that they’ve failed to notice the decoupling of the stock market from the broader domestic economy. This has led to a huge build up of speculative money on the short side of the market as well as lightly invested fund managers. Short covering investors and managers chasing returns could very well push the S&P 500 higher through the end of 2011.