Today, we see the kick-off of the Running of the Bulls in Pamplona, Spain.
The running of the bulls is when idiots and/or men with something to prove about their manhood run in the streets before a pack of animals that will later be ritualistically tortured to death in an arena.
Surely, man at his best. And yes, that's sarcasm. I've seen a bullfight in the flesh once -- for I was also a young idiot in my day -- and I don't need to see another.
Meanwhile, Wall Street has its own Running of the Bulls.
The stock market closed last week up 189% since its bottom in 2009. The S&P 500 index has gained 7.4% for the year so far, building on last year's 30% spike.
Also last week, the Dow pushed through 17,000 -- which any trader will tell you is just a number. Still, it's a big number.
This week, the market is looking to start off with a slump. The reason is economists working at Wall Street banks are moving up their expectations of when the Fed will start hiking interest rates.
And the reason for that is last week's stellar jobs numbers. The Bureau of Labor Statistics showing U.S. employers added 288,000 jobs in June, well above the 215,000 expected by economists. The unemployment rate unexpectedly fell to 6.1%, from 6.3% a month earlier.
Previously, most Wall Street banks hadn't expected the Fed to start raising rates for at least 3 more quarters -- potentially not until 2016. Now, many think the Fed will raise rates sooner and quicker, seeing that jobs are improving so much.
This just shows that most Wall Street economists are idiots. Hey, they missed the jobs growth, didn't they?
U.S. gross domestic product fell at a seasonally adjusted annual rate of 2.9% in the first quarter, the fastest rate of decline since the recession. Most estimates are that GDP is growing at 2% this quarter ... maybe. That's not much. Sure, GDP not a primary indicator for the Fed. But it has to be worried that weakness will continue.
What's more, while inflation is picking up, the official inflation rate is still just 2.1%.
Sure, the Fed will probably get behind the curve as inflation increases. You know how to protect yourself from that. The fact is, the Fed doesn't see inflation now, and that's what matters.
Also, just last week, Fed head Janet Yellen signaled that she would keep interest rates lower for longer than most people think possible. Specifically, she said that it would be a bad idea to raise interest rates to fight financial excesses.
She added: "efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment.”
So no, Wall Street. Yellen is not taking away the punch bowl any time soon. She doesn't want to be the Fed Chair who killed the recovery. Hell no!
I know -- I KNOW -- that it's been more than 1,000 days since the S&P 500 suffered a correction. Specifically, the S&P 500 hasn't suffered a 10% drop from its recent high level mark since October of 2011. That's a long time. A correction seems due right?
But just because you expect it to happen doesn't mean it will happen right now.
Look at it this way: We have central banks around the world keep pushing easy money. From the U.S. Fed to Japan to Europe - which now has negative interest rates - the money sluices are open.
Now, add in that the U.S. and global economies continue to recover. Chances of a "hard landing" in China are receding in the rear-view mirror. However, the recovery remains weak. As long as it remains weak, the Fed (and other central banks) aren’t likely to tighten their easy-money policies.
Meanwhile, Wall Street isn't "euphoric" about this rally. Indeed, it's still widely hated. Many big funds are woefully under-invested. That can be juice for the next big leg up.
So be prepared. The bulls will run. As the guys in Pamplona will tell you, it's best to run with them.