The U.S. stock market has run up magnificently in the last six months. The U.S. economy has begun to recover, but its performance has fallen short of expectations.

Yesterday might turn out to be an important day. The market should have bounced. It didn’t. Instead, it fell 29 points. It’s September, too…a dangerous month. And this rally has already run longer than the rally following the ’29 crash.

What can we tell you about the US stock market that you don’t already know deep in your belly? This is a stimulus rally, pure and simple. It’s one big bet that the government’s funny money will lift up stocks out of mire of the recession… and send them to the moon!

So what has stocks soaring now, during this great deleveraging — this credit crunch — this historic pullback in household balance sheets?

Where are we now? Still in the Twilight Zone economy as far as we’re concerned. US stocks ended strongly on Friday. And they’re set to rise again today if Europe’s strong morning performance is anything to go by. Commodities are up too. Nymex crude oil futures are at $74.24 a barrel at writing. Gold is trading at $953.50 an ounce – not far off Friday’s one-week high.

Investors might forget we’re in a bear market because investing this year has looked easy. Those who have missed out on the rally must be tearing their hair out. Their money burns a hole in their pockets.

This morning, MarketWatch tells us there’s been “a broad-based decline” of shares in Europe. Apparently, “capital adequacy worries” over banks are the cause. We presume this is a polite way of saying banks have no money. 

Since I recommended PepsiCo Inc. (NYSE: PEP) on Oct. 20, the stock has greatly outperformed the market, up about 10%. 

If you want a stable dividend, focus on global companies. Dividends still matter. But you have to know where to look.

Risk Aversion returns…  Money Multiplier dampens stimulus effects…  TIC flows show concern of foreign investors… China back on growth track… And Now… Today’s Pfennig!