As the media trumpets a new marginal high for the much rigged and HFT-jigged S&P 500 (in purple below, over the past year), other global stock markets gave up on the QE dream in 2014 and have been trending lower since (India, Japan, Canada, Germany, UK and China, all shown here).
As we look under the hood of headline highs for the S&P (now trading at a wide-eyed 24.9x estimated GAAP earnings of $86.44 in March), we see that investor flows (red bars below, shown since 1985) have continued to gush out of US stocks even as the price has gone parabolic. So who or what is buying at garish valuations? Why price-insensitive, trend- following computer algos and liquidity-spewing central banks, of course. We will agree with the breathless business media in this much: the S&P 500 is ‘high’ alright.
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