The most noticeable aspect of the markets is that there is nothing noticeable. There has been very little movement of interest rates or stock values. Economic news has been mixed. There is very little happening. Having said that, earnings reports have begun. It will be telling to see whether or not companies continue, in the majority, to outperform the expectations of investment analysts. This has been the case for the prior 3 or 4 quarters, but eventually expectations will catch up.
Fair value of the stock market doesn’t change from week to week. My model continues to show the market near fair value. It was interesting to note, as I attended a presentation by an economist, that his model gave a similar reading. He usually notes that economists don’t make good investors, because they are usually too early. Having said that, his model of the stock market showed fair value, contrasted with his model of government bonds, which appear very overvalued. For those with money to invest, stocks are currently the better choice.