While the U.S. Federal Reserve continues to print money, the U.S. stock market continues to advance higher. Although the Federal Reserve is in now well into ‘taper mode”, reducing the amount of money printing each month, it is still at $45 billion per month. This money is buying U.S. Treasury bonds and gives another injection to the stock market.
Remember that since 2008 each time the Federal Reserve stops a money printing (quantitative easing programs #1, 2, and 3), then the stock market falls. The Federal Reserve is at $45 billion per month and is reducing that amount by $10 billion per month. So in November when the current money printing program ends, that may be a prudent time to sell some of your stocks and lock-in some of your stock market gains. Just be aware that market participants know this and may act well ahead of time!
If the last program end is any guide, then the stock market will fall, the Federal Reserve will panic and then start a new round of money printing to goose the stock market again. However, since labor participation is falling the unemployment rate falsely appears to be improving. This unemployment rate being a low number today at 6.1%, the Federal Reserve may not be so quick to print so much money again. However, the Federal Reserve Chairman did say today that they will not be raising interest rates anytime soon.