Making Sense of the Stock Market Rally

Randolph Duke: Pay up, Mortimer. I've won the bet.

Mortimer Duke: Here, one dollar.

~ ~ ~

Here is a cheat sheet on how to react to market data releases in a 1932 or hyperinflation type equity market rally:

Weak data = Fed ease, stocks rally

Consensus data = lower volatility, stocks rally

Strong data = economy strengthening, stocks rally

Bank loses $4bln = bad news out of the way, stocks rally

Oil spikes = great for energy companies, stocks rally

Oil drops = great for the consumer, stocks rally

Dollar plunges = great for multinationals, stocks rally

Dollar spikes = lowers inflation, stocks rally

Inflation spikes = will inflate all assets, stocks rally

Inflation drops = improves earnings quality, stocks rally

h/t: CIGA Udoran via Jim Sinclair's MineSet.

~ ~ ~

[after Ophelia and Coleman stop Louis from choking Billy Ray]

Billy Ray Valentine: [gasping] It was an experiment... to see how our lives would turn out... the Dukes arranged it... they made a bet.

Coleman: I'm afraid it's true, sir.

Ophelia: I believe him, Louie.

Louis Winthorpe III: The Dukes... ruined my life... over a bet? For how much?

Billy Ray Valentine: A dollar.

Louis Winthorpe III: One dollar... fine. That's the way they want it? No problem.

[cut to Louis cleaning and loading an array of shotguns in the den]