Let's look at the correlation between S & P500 and unemployment claims. The graph shows a fact that we can respond to people who say the recovery of the American economy is a myth and who claim to be in a inflation bubble set up by the Federal Reserve. A balloon that will, of course, burst.
The chart shows that aid applications have reached their worst level in 2009, just as the S&P500 has reached its bottom. However, when applications are declining, the S&P500 is rising. Growth in the economy and declining aid are the "tandem", which demonstrates that the turn of the US markets is in perfect correlation with the demands that reflect the real economic recovery. In this case, the correlation suggests that the S&P500 has the prospect of further growth.
Graphs: Used with permission of Bloomberg Finance L.P.
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