S&P Sets Record All-Time High; Fake Trump Tweet; FOMC Meeting to Begin

With an FOMC meeting in the dock for Tuesday, investors took the opportunity to ramp stocks higher prior to the expected 25 basis point cut to the federal funds rate. Just prior to the opening bell, an apparently fake news story about a presidential tweet appeared on ZeroHedge.com, saying President Trump tweeted, "today will be a good day in the stock market," and, "the China deal is moving forward ahead of schedule."

We checked the president's twitter feed and could not find any such tweet. We also checked Bloomberg, which featured an article on President Trump's tweets that related to the stock market. No such tweet was shown in the article.

This clearly looks like a somebody spoofed the grammatically-challenged Zero Hedge website. It was most likely one of their "reliable" email contacts trying to look good. It's a shame that "the Hedge" has slumped to such low levels of journalism - if that's what you want to call it - because it is normally a pretty good source for economic news not found elsewhere.

Recently, Zero Hedge has taken to posting political and other non-economic articles, to its detriment. Many of the commentators who frequented Zero Hedge in its heyday (2008-2009), prior to it being purchased by ABC Media (British Columbia, not the US media giant). According to the one-liner in the website's footer - Copyright ©2009-2019 ZeroHedge.com/ABC Media, LTD - the company took it out of the original owner's hands in 2009, as the GFC was winding down.

For the S&P 500, Monday was a special occasion, setting a new all-time record high closing. Trump may not have pumped it with a tweet, but his "America First" policies have certainly contributed to the rise of all US indices.

If stocks were overvalued prior to Monday, they are even more overvalued now, and will likely be uber-overvalued after the FOMC announces another rate cut on Wednesday.

In the meantime, earnings season is in full swing. The big story was Google parent, Alphabet, third quarter earnings, reported after the close. Alphabet posted a per-share profit of $10.12 in the quarter, decidedly below the $13.06 a share from the same period last year. Analysts polled by Bloomberg were expecting a per-share profit of $12.35.

The sizable miss was due largely to losses in investments. Among investments that may have contributed to the loss, Alphabet was involved with Uber and Slack, two companies that recently IPO'd and have lost value.

Little of this will affect Tuesday's trade outside of Alphabet (GOOG). There's far too much enthusiasm for equities and anticipation of looser monetary policy from the Fed already backed into the mix.

At the Close, Monday, October 28, 2009:
Dow Jones Industrial Average: 27,090.72, +132.66 (+0.49%)
NASDAQ: 8,325.99, +82.87 (+1.01%)
S&P 500: 3,039.42, +16.87 (+0.56%)
NYSE Composite: 13,186.43, +40.19 (+0.31%)