Replies to post #212700 on SPDR S&P 500 (SPY)

[gdl]

I have been wrong in the past on when inflation starts picking up. Greenspan sees strong evidence but I am not sure what parameters he uses.

The problem is not fear of a heated economy. The FED wants to normalize rates and change the psychology of investors. In the past when we had such a long and strong string of Job growth there usually was inflation consequences. The data is showing the consumer is starting to accelerate spending from a very anemic past.

The market loves the basement rates and a rise at this time will hurt profits. Since profit expectations have been pushed back the forward guidance has been pushed ever so high. An 11 percent profit spurt in next 6 months is still on the table. Strong economy, dollar, and costs will not help them achieve their goal. the market will eventually punish stocks if the profit picture changes dramatically.

I am still expecting a profit shortfall and market correction for 2017.