Not a day passes without some book-talking pundit coming on financial comedy TV with an attempt to explain that it wasn’t James Bullard’s hint of QE4 that sent the market soaring after the near-500 point Dow Jones drop on October 15, you see it was the great results from Q3 earnings season that were the catalyst for the unprecedented, near vertical surge over the past month. Well, they are not completely wrong. As the chart below shows, of the 165.3 point jump in the S&P, EPS growth has accounted for 1.24 of those S&P points, or about 0.7%. The rest, or 164 points is due to nothing less than Multiple expansion, i.e. the “Bullard effect”.
Or, said otherwise, faith that the Fed (or BOJ or ECB) will do even more to save the BTFD algos from a deflationary bust.
via Zero Hedge http://ift.tt/1uCTyxQ Tyler Durden