Stocks Are Soaring Because Supplies Are Limited
In trying to explain the rally, many fail to mention that the number of publicly traded companies has dropped by about half in 20 years.
Many on Wall Street are perplexed by the rally in the stock market.
Photographer: Bloomberg
It’s natural to question rallies in the stock market, but the animosity toward the latest leg up that has pushed the S&P 500 Index, Dow Jones Industrial Average and the Nasdaq Composite Index to new records seems truly exceptional in its cognitive dissonance.
I have spent a 20-year career in finance, so I am used to the stock market confounding naysayers, but this a bit extreme. Equities are on pace to deliver their best annual performance since 2013, with gains this year already exceeding 23% for the S&P 500, and yet investors have poured about $450 billion into money market funds, which is the most since the financial crisis year of 2008. And almost any survey of the mood in markets is far from euphoric levels.