S&P 500, a pause

The weak dollar was cited as reason for yesterday's rally, but there is more to it than that simple explanation. Slack  economic activity has prompted the Fed to keep short term rates low, and the money supply ample in hopes of causing increased economic activity. The cheap rates also provide funding for the carry trade. With the carry trade, speculators and entrepreneurs alike have funding to invest in the assets they choose. Recovery will take a very long time if we tax and regulate the job creating entrepreneurs.




So far today the stock market has paused. In the US the IBD/TIPP Economic Optimism report came in at less than expectations, 47.9 versus 53.1, and 52.5 in the previous period.