There is nothing better than an earnings season to test the stock market of what’s been priced in to prices and what’s not. The S&P 500 is now up 24% since the Aug 26th close in response to a continued economic recovery but also its no coincidence the rally began the day Bernanke in Jackson Hole hinted at buying more US Treasuries on Aug 27th and admitted he wanted to give stock prices a kick in the pants. Following Apple’s outstanding quarterly results and with it being the 2nd biggest company in the S&P 500, today will be an interesting test for the broader market of what’s been priced in and what hasn’t yet. Granted, Steve Jobs’ health is an obvious issue specific to Apple and my question today of what the market has discounted may be premature and we may have to wait thru the next few earnings weeks to see.
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