After yesterday’s sluggish market action, the bullish crowd came out chomping at the bit at the opening bell. The DOW was up by 101 points right at the start, coming within a fraction of the all-time high record close of 18,636 from last Monday.The S&P 500 zoomed to 2193, surpassing the record close of 2190 from last Monday. The NASDAQ rose to 5275, extending beyond its record close of 5262. The NASDAQ has been doing better than the other two indices lately. The Russell 2000 index of smaller stocks is still below its record high of 1296 from June 2015.
Today’s market moved initially higher ostensibly as the result of strong European markets. There was a report from abroad that indicated their purchasing managers’ survey had reached a seven-month high. This seemed to show that the BREXIT vote is so far not having as much of a negative effect on the overall situation there as initially feared.
Breadth numbers are positive at a 21/9 upside ratio. The VIX is nominally lower at 12.11 for a decline of .16. The energy components of the DOW, CVX and XOM, are lower despite crude oil making a turnaround from an initial decline. Crude is currently priced at $48.05 a barrel.
The S&P and NASDAQ have fallen back from their best levels of the session. The leaders to the upside include AMZN, ISRG, NFLX, NTAP, and TSLA ahead of some kind of new product announcement later in the day. BBY is doing really well after its report and helping the retailers do better. TOL is also gaining after its earnings report, giving the homebuilders some gains, too..
Outside markets are making very small moves in anticipation of Fed Chair Janet Yellen’s speech on Friday morning. She is going to lay the groundwork for any rate increases that might or might not be coming. September appears to be completely out of the picture for a rate increase.
Despite the sharp declines early this year, the overall bull market is now in its 87th month. The S&P 500 is positive for the year by 7% after its 11% decline…rebounding to its highs in the fastest time ever for so early in the year. This bull run compares to the average length of 59 months for the 11 bull markets since1949. It is now the second longest bull market in history trailing only the one from 1987- 2000.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated 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.