Exhausted markets got a break Friday, which leaves them and us to handicap the future. Stocks are up a little, but bonds and mortgages are holding their 2016 gains: the 10-year T-note at 2.05 percent, 30-fixed loans near 3.875 percent. Take it from most optimistic to ... not. By spring or summer, we may look back at January as the Great 2016 Head-Fake. The Patriots’ Edelman leaving a linebacker without shoes. Transient stock market thrashing signifying nothing, and not really connected to legitimate global economic issues. That chance may be pretty good. In January 2013, the Dow had sat near 13,000 for two years, also close to recurrent tops in 1999 and 2007. Then from 2013 in a straight line to last summer, the Dow rose to 18,000. No market survives unbroken runs -- dropping to 16,000 last summer, recovering to 18,000, now back at 16,000. In chart-watching terms, the Dow has retraced half of a big and unsupported gain, set a double bottom at 16,000, and might well begin ...
- Many serious people -- and not -- are trying to find Fed-economy-stocks linkage. The Fed did lift from zero in December, but hardly enough to blow up the stock market.
- Collapsing oil prices have perfect correlation to the stock drop, and it’s hard to argue against causation, but equally hard to believe that crashing prices for energy are bad news for the global economy.
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