Why Isn't the Stock Market Crashing?

"It's the economy, stupid." ~ James Carville

With all the negative events of the past week, why hasn't the stock market fallen further?   Charlottesville, Barcelona, Finland and the Trump administration turmoil were all negative events.  These types of events would have caused significant market declines in the past.  Why not now?

Here's my reasons for the resilience of the stock market:

  • The economy is continues to improve.  Corporate earnings are good.   Unemployment is low.   Inflation is low.  
  • The economy is not overheating.  Companies are still cutting costs and not over investing in growth.  There doesn't appear to be any business frothiness.   In fact, the economic recovery continues to one of the slowest ever.
  • No significant bubbles.  The only bubble I see is bitcoin.  Other than the bitcoin markets, there isn't any exuberance.   In fact, there is significant caution in most markets.
  • No recession in sight.  Typically, bear markets coincide with recessions.   At this point, there aren't even small concerns about a recession.

Of course, economic conditions can change quickly, but right now the economy looks very positive to me.

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This is not financial, economic or investing advice. Please consult a professional advisor.

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