Authored by Wolf Richter via WolfStreet.com,
$1.7 trillion blown on making EPS look less bad.
The S&P 500 index, closing today at 2,373, hovers near its all-time high. Total market capitalization of the 500 companies in the index exceeds $20 trillion, or 106% of US GDP. In the three-plus years since the end of January 2014, the index has soared 33%.
Another paradoxical observation emerges when combing through the latest Bank of America data.
First, as discussed earlier today, while a net 48% of surveyed fund managers had an allocation to equities in March, the highest in two years, this flood into stocks has taken place even as the highest number of respondents since 2000 admitted stocks were overvalued.
That was one part.
Well that escalated quickly...
But it's not just BofA - the entire group is getting monkeyhammered...
As a reminder - the gap between the exuberance of rising rates and bank stock prices is very wide...
And the credit market never bought it anyway...
With political uncertainty near record highs (but equity market uncertainty near record lows), Goldman's Jan Hatzius analyzes the four biggest political risks receiving the most attention from market participants (and stand to create the most chaos if the priced for perfection market is disappointed).
Via Goldman Sachs,
Q: What are the near-term risks on the agenda in Washington?
There are four risks we are monitoring that have recently received some attention from market participants:
Former Goldmanite and current Minneapolis Fed president, Neel Kashkari, conducted another #AskNeel session on Twitter where the dovish FOMC voter (he was the only one to dissent in last week's rate hike decision) received numerous question. Among them was the following one from Zero Hedge:
.@neelkashkari You recently admitted the Fed has a "third mandate." What is the biggest S&P drop the Fed will accept before intervening?
— zerohedge (@zerohedge) March 21, 2017
His response: