You could say the market wears an Easter Bonnet.  More accurately, a ‘broadening top’ of significance has been forming for some time now; hence the relatively neutral action in the wake of the push-up after the Fed’s dovish guidance was received in a favorable way. This was solely because it pressed rates even lower, pushing ideas of chasing yield back to the fore; however doing it in a market clearly dealing with a slew of mediocre economic facts and expectations.

In fact Thursday the Atlanta Fed, via the latest ‘Atlanta Now’, provided a picture of anything but a frolicking Easter Egg hunt for elusive bargains with genuinely attractive valuations. In this case, even the consumer stocks are selling typically around 18 times historical trailing earnings; and that’s a couple points too high at minimum. If one looks at the overall S&P 500 historically, valuations aren’t wildly overvalued compared to the prior 5 years; although the growth prospects are on the weaker side, thus must be factored into that evaluation. Thus, with a forward earnings guidance decidedly flat for the S&P; there’s not a greatto point to. It’s almost expecting a miracle, like magic hair growth enhancing value without any real substance existing, able to appear as a ‘feather on the cap’ of this market.

Finally, in this regard, one can look at the Energy Sector. Here; multiples are for sure triple the lows of the prior bear market; but with earnings seriously down; it tends to raise PE’s even as price is meandering after the huge hit. Remember, a PE on individual stocks (more so than the Indexes) will be high both at extended price levels in prosperity, but also as price drops and earnings evaporate in bad. As for Energy; for these prices to be justified you’d really need to see higher Oil (by far) within a few months; and unless it’s geopolitically related, that normally is associated with higher inflation.