Ahead of the Tape
[Today's Market Forecast]</br></br>Number Crunching</br></br>Stock prices are higher, the merger market is percolating, and bonds are in retreat. The bulls are starting to show teeth in their widening grins.</br></br>But Richard Bernstein, a longtime bear, can't quite believe it. The Merrill Lynch strategist, trained in the quantitative arts, sees red flags for stocks every time he cranks up his computer. Valuations are historically high. In May and June, nearly two-thirds of the economic reports he tracks came in below the consensus forecast. Most troubling, inflation barometers are losing momentum, and his calculations hint earnings growth may already have peaked. These findings would shock the smiling bulls.</br></br>"People aren't really looking at the data," Mr. Bernstein says. "Instead, stocks are reacting to the Greenspan put [low short-term rates], the Bush put [hyperactive fiscal policy] and an overwhelming fear of getting left behind."