Doesn't feel that way, does it?
As Dr. Sanity points out, the little voices of the defeatist media who want all good things to happen only under democrats have been whispering doom and gloom.
And yet the objective fact is, the initial reading for third quarter GDP was +3.8%, when only +3.6% was expected, and either one is a really good number.
That also means we've expanded at over 3% for 10 quarters in a row -- a new record!
In fact, BizzyBlog points out:
So when was the last time the economy expanded faster than 3% for 10 straight quarters?The cause, of course, is the Bush tax cuts, along with technologically-driven productivity gains.
It didn’t happen during the 1990s (the longest streak was eight).
It last happened during the 13 quarters from 1Q 1983 through 1Q 1986. Not coincidentally, a president [Reagan] who believed in lowering taxes to stimulate economic growth was in charge the last time it happened.
So despite being at war, despite devastating storms, and despite legislative and regulatory drags on the economy like Sarbanes-Oxley, this has been most consistently growing economy in almost 20 years.
Not only that, the US economy has NEVER had a streak of more than 7 quarters of 3.0% or greater annualized growth at any other time in the 58 years that quarterly GDP statistics have been kept!
Unemployment is low, as is inflation.
S&P500 operating earnings have also expanded by double digits, quarter over quarter, for the last 14 quarters!
And in fact, trailing 4-quarter earnings are at RECORD HIGHS.
That's right, the broad market is making record earnings, well above those of the "go go" years of the late 90s.
Yet the market index itself is far below its highs.
That's the effect of media-induced malaise, as interest rates are still low.
The market peaked around 1500 in 1Q2000, when earnings had reached a then-record $54 per share. That was too high.
At a Price to Earnings ratio of 20, it should have been around 1100.
Now they have rocketed to $74 per share, but the index is at 1200. That's too low.
At a Price to Earnings ratio of 20, the S&P500 should be about 1500, getting back to its old highs!
So the S&P could go up by 25% tomorrow to new highs, and it would be fairly valued.
Note: I don't want to hear about "long term average PE ratios" being 16 or something like that -- that's irrelevant, as interest rates have fluctuated and the "fair value" PE depends on the interest rate. On an interest-rate adjusted basis, the average historical PE ratio is more like 20.