Last week’s stock market performance was something to see, sparking by Covid Delta Variant outbreaks. Perhaps the most frightening event was Anthony Fauci hinting that a return to indoor mask mandates for vaccinated people and booster shots may be necessary to once again curb the spread of the virus.
But the week ended higher than where is started.
But since the initial Covid outbreak in early 2020 and the burst of M2 money stock, the S&P 500 index has risen steadily along with M2 Money stock.
The Buffett Indicator (or ratio), the ratio of composite market value to GDP, shows that stocks are alarmingly overvalued.
The Shiller CAPE ratio, cyclically-adjusted price to earnings ratio, is also flashing a warning signal. Shiller CAPE ratio on Friday was the highest since the dot.com bubble of 2000.
In other news, the world’s biggest coffee producer, Brazil, saw a large portion of its coffee crop get damaged by frost, which sent coffee futures soaring to their highest point in nearly a decade.
Is coffee the new gold? Probably not.
Jerome “Trouble” Powell