Friends
Today was a good day for the bulls. Nearly every trading session over the past three weeks has produced a triple digit move in the Dow, and today was no exception. Fueled by some very good economic news including a much better than expected consumer confidence number and better than expected durable goods and Richmond Fed numbers, not to mention a stellar Case-Shiller HPI report, stocks had an upward bias from the opening bell. Yes, despite another difficult day for bonds, stocks rallied.
By the close, the Dow Jones Industrial Average was up 100 points to finish the day at 14,760. The S&P 500 was up 14 points to close at 1588. Gold was down $1.50 to trade at $1275 per ounce, while oil was up $.05 to trade at $95.23 per barrel WTI.
Boy, if we were laying out the playbook, this is just how we would want it to work. Very good economic news leading to climbing interest rates (bad for bonds), paving the way for better corporate revenues which would lead to a more sustainable rise in equity prices. No, we haven’t escaped the adjustment phase that easily, but rates rising for a good reason (economic growth) rather than a bad reason (no one wants our bonds), would help calm some of the market participant’s anxiety that we have seen for the past few weeks. It’s only one day, and a Tuesday at that, but it’s sure better than yesterday. Let’s see if the bulls can build on this tomorrow. My guess is that this adjustment phase is going to take a while yet. This week is the end of the quarter, so don’t read too much into the moves.
Have a nice evening everyone.
