A Significant Disconnect Between the Markets and the Main Street Economy is in Full Swing. Stock and Equity Values Increased Yesterday to another Record High While Numbers for U.S Wholesale Prices, The Empire State Manufacturing Index and Industrial Production all Dropped According to the Latest Reports.
“U.S. wholesale prices fell by a seasonally adjusted 0.7% in April, the biggest drop in more than three years.” April Energy Prices Fell 2.5%, April Food Costs Fell .8%. Manufacturing Conditions in New York Dropped from +3.1 in April to -1.4 in May. Industrial Production Fell .5% In April.
You Can Find the Details on the PPI, the Empire State Manufacturing Index and Industrial Production at http://www.bloomberg.com/markets/economic-calendar/
According to PIMCO, the Largest Bond Manager, the U.S. and Global Economies May Reach an Inflection Point. While the Federal Reserve and Central Banks Through Quantitative Easing and Historically Low Interest Rates have Inflated Equity Values Real World Measures of Economic Activity Show Little Improvement. Either The Real Economy Will Reach Growth Levels Which are able to Sustain Higher Market Valuations or the Bull Market Will Fizzle.
You can read PIMCO’s Mohamed El-Erian’s View at http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=169955.xml