Before I get into the specifics of what took place during yesterday’s rousing upside session, let it be pointed out that the S&P 500 has now tied the December 1995 hallmark of 106 days without a decline of more than 1%. The next target of 111 sessions was in May of 1995. We have to go all the way back to the 1950’s and 1960’s for the longest such streak of 185 days that ended in November 1963.
After the prior day’s lower session, the market went back to its upside ways yesterday ahead of the all-important 2 PM Fed announcement. The Dow was up 40 points when the announcement was made and from there it did its usual little jiggle and chop, finally ending with a 118 point advance up to 20,950. The S&P followed the same pattern and finished even better with a 20 point gain to 2385. The NASDAQ closed within 11 points of its best ever level with a 43 point surge up to 5900. Even the recently forgotten Russell 2000 Index of small stocks put in a very good effort to come out of its recent funk.
The most dynamic move came not from stocks but rather from the bond and currency markets. They did the exact opposite of what all the experts thought they would do after the expected Fed rate hike: instead of rates going up and the dollar getting stronger, the reverse occurred.
Today, the markets took a little breather with the DOW down 15, the S&P off 3, and the NASDAQ gaining a fraction.
There were a number of economic reports today. Weekly jobless claims fell by 2,000, down to 241,000 for the 106th straight week below 300,000. This is the longest such streak since 1970 when the size of the labor force was much smaller than it is today. The March Philadelphia Fed Manufacturing Index declined to 33 from 43 the prior month…the highest level in 33 years. However, the new orders component rose to its highest level in 30 years. February housing starts rose by 3% to their best level in over nine years, but building permits, an indicator of future acclivity, declined by 6%.
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 Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide 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.