The answer is an unqualified "maybe."
Last week, the Dow Industrial Average gained 1.4% to close Friday at 11,808.79. The Standard & Poor's 500 Index rose 1.1% to 1238.25. But the Nasdaq Composite Index fell 1% to 2637.46.
So while it seems like stocks have come a long way in a short time - and they have - in the big picture, we're still crawling and clawing our way up...
However, after hitting 5,048 in March 2000, the Nasdaq Composite is still almost 50% below that high-water mark.
It's the Composite's lack of traction that worries me.
It tells the story, not just of the tech wreck of 2000, but of technology and growth companies at the margins failing to get any meaningful traction. (And many are marginal indeed. Of the 3,000 companies in the Composite, most are smaller than the average companies in the S&P and Dow.)
Given that, you may find it hard to believe we can get back to old highs on the major industrial indexes.
But it is more than possible.
That's because so many of the companies in these indexes are "global" in terms of their inputs, sales, and revenues. And thanks (almost exclusively) to global growth, these big companies are momentarily well positioned. Thanks to overseas sales, their earnings have been strong. And when the revenue streams earned globally are translated back into cheaper dollars, currency gains make net profit numbers a lot stronger.
In this sense, actually, the Fed's quantitative easing programs helped hugely - both by lowering the U.S. dollar's value and by lowering interest rates. Low rates allowed companies to re-tool their balance sheets by retiring debt and reducing the cost of outstanding obligations.
Regarding this most recent rally, the European picture is what brightened the big-cap world and set the stage for this upward movement. Specifically, it's optimism that an effective backstop plan to save Europe from imploding continues to drive shorts to cover.
And if any plan put forward is even credible, it would set the stage for an even bigger market rally.
But we're not there yet...
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