Markets reversed their downward trajectories during regular trading this Thursday, with the Dow overcoming a 350-point deficit to close up 200 points, or +0.62%. The S&P 500 brought in +0.53% on the day, and even the recently beleaguered Nasdaq posted gains of 0.12%. The Russell 2000, bouncing back from two awful sessions Tuesday and Wednesday, posted 2.29% gains on the day to break a three-day losing streak.
What turned everything around? It wasn’t the cargo ship in the Suez Canal; that’s still stuck. (Somewhat surprisingly, this strange snafu has generated little interest on commodities trading since yesterday, when the accident was first reported.) There weren’t any major economic news items dropping ahead of the noon hour, nor any economic reads after the very nice Initial and Continuing Jobless Claims numbers before today’s opening bell.
Those strong claims numbers — below 700K on new claims for the first time since the pandemic took hold — may have brought some investors to the realization the Fed may be closer than expected to accomplishing its dual mandate: inflation at 2% and full employment. Though we’re still millions of jobs short of where we were in February of last year, and the 10-year bond rate has remained in the 1.6%s all week, perhaps the “cheap money, longer” party was about to flash the bar lights.
But Fed Chair Jay Powell put that to rest today when, although he acknowledged economic strength beginning to come in hotter, sooner than expected, made it clear that only a gradual reduction of accommodative measures will be undertaken if and when the time is right. That time is not now, regardless, but it also looks like it will not be tomorrow or next week or next month, either. Which allowed buyers to come back in and start adding to equity portfolios.
We said here early this week that we’re in a period of finding equilibrium. We’re still weeks away from Q1 earnings season taking over the narrative of economic health, still one week and one day away from new March Employment Situation numbers, and the stimmy checks have yet to made their impact felt as of yet. Once these things start happening, we may see another leg up in valuations; for now, traders are cooling their heels.
Friday morning will bring us fresh Personal Income and Consumer Spending numbers for February, along with Core Inflation and Advance Trade on Goods, also for February. Month over month weakness is expected across the board, although the Income and Spending figures from the previous month were the highest they’d been since the earliest reads of the pandemic, at least. In all, more grist for the mill. Not a bad thing.
Questions or comments about this article and/or its author? Click here>>
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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Markets Reverse Course, Swing Back to Positive
Markets reversed their downward trajectories during regular trading this Thursday, with the Dow overcoming a 350-point deficit to close up 200 points, or +0.62%. The S&P 500 brought in +0.53% on the day, and even the recently beleaguered Nasdaq posted gains of 0.12%. The Russell 2000, bouncing back from two awful sessions Tuesday and Wednesday, posted 2.29% gains on the day to break a three-day losing streak.
What turned everything around? It wasn’t the cargo ship in the Suez Canal; that’s still stuck. (Somewhat surprisingly, this strange snafu has generated little interest on commodities trading since yesterday, when the accident was first reported.) There weren’t any major economic news items dropping ahead of the noon hour, nor any economic reads after the very nice Initial and Continuing Jobless Claims numbers before today’s opening bell.
Those strong claims numbers — below 700K on new claims for the first time since the pandemic took hold — may have brought some investors to the realization the Fed may be closer than expected to accomplishing its dual mandate: inflation at 2% and full employment. Though we’re still millions of jobs short of where we were in February of last year, and the 10-year bond rate has remained in the 1.6%s all week, perhaps the “cheap money, longer” party was about to flash the bar lights.
But Fed Chair Jay Powell put that to rest today when, although he acknowledged economic strength beginning to come in hotter, sooner than expected, made it clear that only a gradual reduction of accommodative measures will be undertaken if and when the time is right. That time is not now, regardless, but it also looks like it will not be tomorrow or next week or next month, either. Which allowed buyers to come back in and start adding to equity portfolios.
We said here early this week that we’re in a period of finding equilibrium. We’re still weeks away from Q1 earnings season taking over the narrative of economic health, still one week and one day away from new March Employment Situation numbers, and the stimmy checks have yet to made their impact felt as of yet. Once these things start happening, we may see another leg up in valuations; for now, traders are cooling their heels.
Friday morning will bring us fresh Personal Income and Consumer Spending numbers for February, along with Core Inflation and Advance Trade on Goods, also for February. Month over month weakness is expected across the board, although the Income and Spending figures from the previous month were the highest they’d been since the earliest reads of the pandemic, at least. In all, more grist for the mill. Not a bad thing.
Questions or comments about this article and/or its author? Click here>>
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>