Last week’s disappointing GDP release and hints of an impending rate hike were met with a throng of market celebs calling for a drop in equity prices. But it appears that this group is merely leaving the party early. 

Why the skepticism?  First off, the GDP numbers weren’t as bad as they appeared. According to BCA, most of the revision was due to inventories and net imports.  Gross domestic income, which many economists believe is a more accurate assessment of economic activity, actually increased last quarter. 

Second, I think that any market sell-off will be preceded by higher rates. Amid all the talk of a hike, there is no way the Fed will play that card unless the economy is hitting on all cylinders and there is at least some price inflation. We’re simply not there yet. 

My third reason that this isn’t a market top has to do with the nature of crowds. There are so many folks talking about stocks heading south that it just can’t be true.  Negative press sells much better than good news, but even the talking heads can’t force the market down just to make a headline. My advice is to stay the course for now.  

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