As if yesterday’s upside bonanza was not enough, the market followed through to the higher side again today. Stocks came blazing out of the starting gate and rarely looked back. At the closing bell, the DOW had gained 145 points, the S&P 500 was up 14, and the NASDAQ was higher by 33 points. Investors who had shunned the market after the declines to the lowest levels in seven weeks, could not seem to buy fast enough.
The financials and technology stocks led the way today. AAPL in particular continues to punish its detractors after having fallen down to the $90 level. It closed at $99.62 today. C, WFC, and GS gained more than 2% in today’s session.
Breadth numbers were positive at a 2 to 1 upside ratio. The VIX is at its lower levels now at 13.90 for a decline of .52 today. If this continues we are going to reach the critical battleground levels of 18,000 Dow, 2100 S&P and low 13’s on the VIX. The struggle will be waged here again and the markets will probably fail because there is really nothing further to motivate the upside to new all-time highs…especially ahead of the second-quarter earnings reporting period in July.
Fed Chair Janet Yellen will be making a speech on Friday. This might further clarify the central bank’s intention on whether or not they are going to move rates higher in June. This direction is gaining more credence as the market continues to rally. The perception now is that investors feel that the economy is strong enough to handle rate increases. The next revision of first-quarter G.D.P. on Friday morning will help resolve this question, too. Of course next Friday’s jobs report will give us the ultimate answer.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated with permission from the author. Don Selkin is the Chief Market Strategist at National Securities Corporation, member FINRA/SIPC, (NSC) and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide our customers with timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.