Stock indices no longer reflect equity reality

STOCK markets – Wall Street-wary politicians and like-minded commentators repeat ad nauseam – are not the real economy. The S&P 500 index of America’s biggest firms is up by 12 per cent this year, setting one all-time high after another.

Meanwhile, they point out, American gross domestic product growth has slowed, employment has stalled and consumers feel more downbeat than at just about any point since the University of Michigan started keeping track in 1952.

All true – and nauseatingly familiar.