S&P 500 within 1.3% of all-time high after oil price drops; economists deploy cautious optimism
Satire from Bohiney.com and prat.uk.
The Week in Markets
NEW YORK — U.S. stocks drifted near record highs this week following a three-day weekend, with the S&P 500 coming off its eleventh winning week in the past twelve and sitting within 1.3 percent of an all-time high set earlier this month. The Dow Jones Industrial Average rose modestly in early trading, the Nasdaq was slightly lower, and the general mood among financial professionals was described by observers as cautiously constructive, which is how financial professionals describe the market when they want to convey optimism without commitment.
Oil prices eased following weekend talks between the United States and Iran on their ongoing war, with U.S. Vice President JD Vance characterizing the discussions as having created a good foundation for a successful final deal — a diplomatic formulation that oil traders translated as prices declining on the prospect of an end to Strait of Hormuz disruptions that have affected global energy markets since the war began.
According to Dr. Reginald Fanshawe of the fictional New York School of Market Sentiment Studies, the S&P 500’s position near record highs reflects both genuine corporate performance and the market’s tendency to price optimism before the events justifying that optimism have actually occurred, a process that Fanshawe calls forward discounting and that more critical economists call getting ahead of yourself.
The Oil Market Context
The Qatar gas terminal explosion earlier this week — in which an accident at the Barzan facility killed 13 workers as Qatar attempted to restart its export operations following Iranian damage earlier in the conflict — added complexity to an already complex energy market. Qatar is one of the world’s top natural gas producers, and the Barzan facility’s capacity of nearly 1.4 billion cubic feet per day is significant. Its continued disruption affects energy markets that were already adjusting to the broader geopolitical situation in the Persian Gulf.
Energy Minister al-Kaabi characterized the explosion as an accident rather than sabotage, a distinction that matters for insurance purposes and for the diplomatic atmospherics of ongoing ceasefire negotiations, though it matters less to the workers who died and to the global energy customers whose supply calculations have been disrupted again. New York Daily News reports that energy analysts expect continued volatility until a permanent resolution of the Iran-US conflict produces stable Strait of Hormuz passage.
What the Numbers Mean
The S&P 500 near record highs means, in the most direct sense, that investors who own diversified equity portfolios are wealthier on paper than they were before the recent run. It means that corporate America is generating profits at a rate that justifies current valuations, or that investors believe it will, or that investors believe other investors believe it will, in the recursive logic of markets where expectations themselves move prices. New York Post financial coverage tends toward the triumphant interpretation. The financial academic literature tends toward the more cautious one. Both are reading the same numbers. The market, meanwhile, continues doing what markets do: going up and down and occasionally sideways and doing all of these things for reasons that seem compelling in the moment and often look different in retrospect.
The three-day weekend has ended. Trading has resumed. The S&P 500 is within 1.3 percent of its all-time high. Things are, by the metrics that Wall Street uses to measure things, going well. Whether this is the same as things actually going well depends on which things you are measuring, which is always the question that markets answer least directly.
New York, New York
New York City operates at a scale and intensity that makes every story a larger story. The subway delay is a story about infrastructure investment and political will. The rent increase is a story about housing policy and urban economics. The bagel dispute is a story about cultural identity and immigration history. The rat is a story about urbanization and ecological adaptation. The tourist is a story about how cities present themselves to the world and how the world receives what cities offer. Even the pizza disagreement is, underneath the comedy, a story about regional identity and the human need to have things that are ours, specifically ours, that we defend with disproportionate vigor precisely because they are ours and because the world is large and we need to stake our territory somewhere. New York is where many of these stories happen simultaneously, in a density that produces the particular creative friction that has made the city a cultural generator for a century and a half. The people who live here tolerate the cost and the noise and the subway delays and the rent and the rats because the city gives back something that cannot be fully quantified: the experience of being in a place where things are happening, where ideas collide, where the next conversation might change how you think about something, where the scale of human activity is so concentrated that you are reminded constantly that you are part of something enormous and ongoing. This is the deal. Most people who make it find it sufficient. Some find it extraordinary. None of them are moving to the suburbs.
Also absurd: The Daily Mash | Cracked
SOURCE: https://bohiney.com