The Federal Reserve has been on a publicity mission to quell this disconnect between reality and the stock market. They’re letting investors know that inflation is still a danger (Bernanke and Hoehnig spoke earlier this week), because the market is expecting a Fed cut, causing the market to go up.

CNN:
“U.S. interest rates may not be high enough to quell a recent bout of inflation, Philadelphia Federal Reserve President Charles Plosser said Thursday….The bond market reacted negatively to Plosser’s comments, since many investors had been betting an economic slowdown could force the Fed to start cutting rates by early next year.”

no_such_reality, your screen name is fitting, because your list is a complete disconnet from reality. Oil is still up vs. 2 years ago (you’ve got to overlook the temporary summer spike – so what if we’re down from April, we are still up over January), corporate profits are shrinking, worker unemployment is level BUT their hours have been CUT so their wages are down esp. in construction and retail, retail employment is way down, inflation is still a problem according to the 3 Fed Reserve speeches this week, and housing continues falling. We’ve had the first national fall in median prices since the early 1990’s. What tame housing? The list you provided has no link to the reality.