Sure baby, mañana. It was always mañana. For the next few weeks that was all I heard––mañana a lovely word and one that probably means heaven. – Sal Paradise, main voice in Jack Kerouac’s “On The Road”
That famous line from “On The Road” came to mind after I read a summary of the Fed’s Bill Dudley’s speed today in which he admitted that the Fed is often “too optimistic” in its economic forecasts but that he himself saw a stronger economy in 2014: “Tomorrow and tomorrow and tomorrow…It’s a tale told by an idiot, full of sound and fury, signifying nothing” (Macbeth).
For two days in a row now, the stock market – as represented by the S&P 500 – opened up with big moves higher, only to reverse course and close well off its highs of the day. As I write this, the SPX has sold off into negative territory. If the outlook is for a better economy, why this market action? In fact, yesterday the Dow Jones homebuilder Index closed negative and over 2% off of its early-day highs. This is the action of a market that wants to go lower and it wants to go lower because fundamentals are deteriorating.