The S&P 500 closed at an all-time high on Friday.
Meanwhile, estimates for U.S. GDP growth in 2013 have been falling for two and a half years.
Bloomberg Chief Economist Michael McDonough tweeted a chart tracking the two measures since February 2011.
It’s quite the head-scratcher.
To be clear, the U.S. stock market and U.S. economy aren’t exposed to the same things. Perhaps the biggest difference is that U.S. stocks, as measured by the S&P 500, generate roughly half of their business abroad.
Also, stocks move based on expectations for growth and certainty about those expectations. Sure, the near-term growth expectations have come down. But uncertainty, as measured by the policy uncertainty index or the CBOE volatility index, are near their post-crisis lows.
Regardless, the U.S. economy is the biggest source of business for the S&P 500 companies. So, it’s ok to be confused and perhaps frustrated by this chart.