The Dow Jones Industrial Average and S&P 500?
The Dow Jones Transportation Average?
The Dow Jones Utility Index? Just about there. Even the Nasdaq Composite Index is closing in again on its bubble-era peak of 5,140 from March 2000.
Heck, we just saw Apple (AAPL) split its stock 7-for-1. That’s the kind of big-time stock-splitting we saw with incredible frequency in 1998, 1999 and early 2000 when stocks like Qualcomm (QCOM) were moving in $50 and $100 daily increments!
In fact, the S&P 500’s bull market is now entering its 62nd month. If it manages to rally for just two more months, it’ll be the longest bull market in the last 85 years! We haven’t seen a 10 percent correction since all the way back in the summer of 2011.
Merger-and-acquisition activity is continuing to boom as well. Just today, mega-drug firm Merck (Weiss Ratings: MRK, B) offered to buy Idenix Pharmaceuticals (Weiss Ratings: IDIX, D) for $3.9 billion in order to get its hepatitis C drugs. The $24.50-a-share bid was more than triple Idenix’s pre-bid price!
We also learned that Tyson Foods (Weiss Ratings: TSN, A) raised its bid for Hillshire Brands (Weiss Ratings: HSH, C+) yet again, to $63 a share. That equates to a price of $8.6 billion including debt, something Tyson hopes will be the last step in the frantic M&A process.
|The S&P 500’s bull market is close to becoming the longest running bull market in the past 85 years.|
About the only market that’s not setting all-time or multi-year highs is the market for VOLATILITY! The “VIX” index that tracks stock volatility just sank to 10.7 at the end of last week. We haven’t seen anything like that since the very tail end of the last bull market in 2006-07. A separate Deutsche Bank analysis pegs markets as being swept up in the extreme “mania” phase.
“I’ve gotten much more selective as the bull market ages and complacency ramps higher.”
Me? I have started recommending my subscribers take profits on positions into strength … add protective stop-loss orders … and zero in more on higher-rated stocks in powerful sector bull markets. Or stated another way, I’ve gotten much more selective as the bull market ages and complacency ramps higher.
I can’t tell you if this party ends tomorrow, next week, or next month. But it’s getting a little too loud, the crowd is getting a little out of hand, and the risk of the cops showing up and shutting things down is rising with each passing day.
|OUR READERS SPEAK|
I appreciate Mark Najarian stepping in on Friday, and I trust you got a lot out of his analysis of the investment merits of Brazil. Many readers cited government corruption, challenges in the mining sector and other factors as key investor headwinds.
Reader Alan B. summed it up by saying, “There are better places and sectors so why take a chance? Check any major list of top stocks and see how many are based south of the border!”
Reader Dani added that out-of-control housing inflation … and inflation in general … are major drawbacks to him. He added:
“Brazilians buy everything on credit, even their clothes! But this is no wonder as the whole boom of the last ten years was based on easy consumer credits and the need of China for Brazil’s commodities. The average Joe in Brazil is so heavily indebted that he has to use almost half of his monthly salary just to repay his credits.
And he said: “One of the main problems of Brazil is also competitiveness. The quality of the products ‘Made in Brazil’ is rather poor. So if they cannot compete on quality they have to be competitive on price. But that’s also not possible because of a rather expensive work force and all the taxes, fees, regulations etc. from the government. This makes it difficult for Brazil to compete on the global market.”
Still, the eyes of the world will undoubtedly be focused on Brazil beginning this Thursday with the start of the World Cup. We’ll have to see if the face that Brazil shows the world is a positive one or not. If you have any additional thoughts, be sure to share them below.
|OTHER DEVELOPMENTS OF THE DAY|
Taliban gunmen raided the main airport in Pakistan as part of a terrorist attack. A total of 29 people died, including the attackers, after a lengthy gun battle with security forces at the Karachi airport.
The economic calendar is a lot lighter this week versus last week. But the positive feelings from Friday’s jobs report clearly spilled over into today’s session.
The U.S. created 217,000 jobs last month, the fourth-straight reading above 200k. That hasn’t happened since the economic boom in 1999. Unemployment held at a five-plus-year low of 6.3 percent.
When my wife, Kim, and I honeymooned in Europe two years ago, we visited one of the Continent’s “love lock” bridges in Florence. But sealing your love by snapping a padlock shut on a picturesque bridge there — and tossing the key into the river — risked drawing a fine.
Now in Paris, it just caused a railing to collapse on the Pont des Arts. I hope they don’t get rid of the tradition though – seems appropriate for a city so associated with love.
Reminder: If you have any thoughts to share on these market events, all you have to do is enter them below.
Until next time,