There’s good reason to think the stock market is overvalued—perhaps not grossly so, but by historical standards at least—and is due for a retreat, which is perhaps what happened yesterday. One of the key gauges of market complacency is the VIX index, which has been very very quiet of late—often a contrary indicator. Well, problem solved!
I also got to wondering whether any of the prediction markets were jumping to the media tune of Trump’s Troubles, and I was not disappointed (courtesy the Daily Shot people):
Yes, yes, we do need to keep in mind that many of these same prediction markets were wrong about Trump, Brexit, and the Atlanta Falcons at the end of the third quarter. But they are a good gauge of uncertainty, which is never the friend of markets. Maybe if Congress could show some progress on tax reform. . .