Five years from U.S. stock market's low, it's joy versus worry

On this day in 2009, the S&P 500 hit its nadir, closing at 676.53. That low marked a climax of a 16-month selloff that took more than half the S&P 500's value. 

Since that day, the Standard & Poor's 500 index has gained more than 177 percent, the best rolling five-year performance since the June 1996 to June 2000 period that covers the dot-com bubble.

Building boom signals stock market bust

Commentary: Do skyscrapers foreshadow market troubles?

According to a study recently published in the Journal of Financial Research, not long after construction begins on a number of large buildings or they are actually finished, the stock market goes into the dumpster.

 In 1929, the Chrysler Building was under construction, while work was about to begin on the Empire State Building. This was an era that Real Estate Weekly considers to be “the greatest skyscraper boom in history.”

 In 1993, construction began on the world’s tallest building, the Petronas Towers located in Kuala Lampur, Malaysia. Before its doors were opened, this super skyscraper was engulfed in the Asian Financial Crisis that sent stocks sinking around the world. 

Fourteen years later, in 2007, construction began on what was slated to be the tallest building in the Western Hemisphere, the Chicago Spire. Like in the past, this was just one of the many towers being erected at that time. Indeed, the total square footage underway in 2007 was more than twice the average of the previous 20 years, writes Prof. Loffler.

 That brings us to the present. In the words of Real Estate Weekly, today there is “a flurry of towers under construction or planned.” By Loffler’s theory, the stock market could be heading for a header.

DYI Comments:  The new World Trade Center is now open with their tenants moving in.  Time Magazine has a fantastic article and pictures of the center.  The world over 2013 was a great year for tall buildings.

2013 Was A Remarkable Year For Skyscrapers

In terms of sheer height, however, it should come as no surprise that Dubai was, once again, a dominant force. The tallest building completed in 2013 was the JW Marriott Marquis Hotel Dubai Tower 2, topping out at 355 meters, or 1,165 feet, tall. But the JW Marriott wasn't the only super-tall building to debut in the glitzy Persian Gulf country last year. For the second year in a row, three of the top five tallest buildings to be completed were in the United Arab Emirates. 

Despite all of the media attention surrounding One World Trade Center and its spire, only one building over 650 feet was completed in the United States in 2013, New York's 1717 Broadway. Europe, on the other hand, debuted two of the year's 10 tallest buildings for the first time since 1953, including the controversial Shard building in London. 

DYI Comments:  Will the pin that burst this stock market come for overseas?  If this idea of skyscrapers as a sell indicator holds true then an overseas event is most likely the case.  Since very little building is going on in America.  Never the less the stock market is poised for poor returns going forward.

DYI