New highs for stocks: April Fool's!

(MoneyWatch) Investors had an extra day to gloat about the stock market, since markets were closed in honor of Good Friday. Of course everyone you meet these days was "smart enough" to get back into the equity markets at the lows -- these are also the people who miraculously got out at the end of 2007!

Yes, the Dow had its best first quarter performance since 1998; the S&P 500 finally closed above it's October 2007 nominal closing high of 1,565; and the NASDAQ has at least recouped all of the losses from the financial crisis. Still, the tech-heavy index remains 35 percent below its all-time nominal high of 5,048, reached in March 2000. (The NASDAQ must climb 55 percent from current levels to take out the previous high. In other words, don't get your hopes up for a record any time soon.)

OK, so with yet another "record high" for a major index, a reminder that the number is not adjusted for inflation. APRIL FOOL'S: When factoring in the rate of inflation, the Dow would have to climb to 15,731.54 to break its real record and the S&P 500 would have to reach 1,765. Sadly, after adjusting for inflation, all three U.S. stock indexes are still well below their year 2000 peaks. This chart from Doug Short at Advisor Perspectives spells it out:

Yeah, those records aren't as much fun now, right? Still, there is something to be said for the stock market being able to climb out of the financial crisis after four long years. The next step will be for ordinary Americans to follow suit. This week, the government will release the March employment report. The past 4 months has seen average monthly job creation of over 200,000, but 12 million Americans are still out of work and 4.8 million have been unemployed for more than 6 months. Since 2007, the year of those stock market records, the economy has lost 3.2 million jobs.

And then there's that pesky matter of real per capita disposable income, which according to the Bureau of Economic Analysis, has shrunk at a 0.4 percent annualized pace over the past five years, compared to rising at an annual pace of 2.2 percent from 1964 to the present. There was a glimmer of hope on the income front Friday, when the government reported that after-tax income adjusted for inflation rose 0.7 percent, which helped consumers absorb higher fuel prices.

With real incomes down, stock indexes well-below their inflation adjusted levels and house prices still nearly 30 percent lower than the peak, it's no wonder Consumer confidence "unexpectedly" fell in the last reading and the savings rate is only 2.6 percent, a five-year low.

Markets:

-- DJIA: 14,578 up 0.5 percent on week, up 11.2 percent on year

-- S&P 500: 1,569, up 0.8 percent on week, up 10 percent on year (Nominal high; up 132 percent from 3/9/09 low of 676)

-- NASDAQ: 3,267, up 0.7 percent on week, up 8.2 percent on year

-- April Crude Oil: $97.23

-- April Gold: $1,594.80

-- AAA nat'l average price for gallon of regular gas: $3.64

THE WEEK AHEAD:

Mon 4/1:

9:00 PMI Manufacturing

10:00 ISM Manufacturing

10:00 Construction Spending

Tues 4/2:

Automobile sales

10:00 Factory orders

Weds 4/3:

8:15 ADP Private Sector Employment report

10:00 ISM non-Manufacturing index

Thurs 4/4:

Bank of England and European Central Bank interest rate announcement

Chain Store Sales

7:30 Challenger job-cut report

8:30 Weekly claims

Fri 4/5:

8:30 Employment Report (Consensus: +200,000; unemployment rate = 7.7%)

8:30 International Trade

3:00 Consumer Credit