Stocks were on a tear today as the first look at the GDP number for 4Q 2015 came in as lousy as expected.
If the past is any indication, the next two revisions will take it lower to the zero bound, perhaps even negative.
Digging beneath the numbers, it appears that rising healthcare costs were a major contributor to GDP. Since healthcare costs in the US are far above what is paid in the rest of the developed world, one might consider the growth of those costs as a distortion on the greater economy, almost in the manner of a tax.
And the BOJ shocked the markets by opting for negative interest rates, just one week after Kuroda san came out and said they were not going to do it.
One wonders what they have seen that so greatly changed their minds and so quickly.
Stocks may have a little more upside, and the targets on the charts are somewhat visible to the discerning eye. But we must be wary of a failed rally on puff and stuff and HFT buying in the short squeeze. Because the problem with this market in general is that its underpinnings are lacking in substance to say the least, and vulnerable to a decline.
Have a pleasant weekend.
