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The markets, which began the day under pressure yesterday, ended near their highs by the close. And both the Dow and the S&P finished in the plus column once again.
All morning long yesterday, the financial shows obsessed over the 30 year anniversary of the Black Monday Crash of 1987.
The way people were carrying on, it was almost as if they were expecting some similar calamity to befall the market again. And for no particular reason.
It was almost comical watching the breathless recounting of that day and the clumsy segue into whether we could see that happen again.
If you were new to the market (and the nervous type), you probably were dreading the open.
And sure enough, the moment the opening bell rang, the markets dropped. On TV they were counting how the Dow was down 50 points, and then 100 points, and oh my.
Big deal.
(And news-alert for the TV shows -- quit making a big to-do over a 100 point decline in the Dow. 100 points isn't what it used to be. No need to make a fuss over less than a half percent pullback.)
As it turns out, no crash was going to happen yesterday.
The markets soon shrugged off their meaningless pullback and they began making their way back up.
That doesn't mean we can't or won't see real pullbacks in the future. You can bet we will.
But guard yourself against the nonsensical hysteria you see on TV or read about online. That goes for both the good news and the bad news.
What did matter yesterday was the following: Weekly Jobless Claims fell 22,000 to 222,000 -- the lowest (best) reading in 44 years! And the Philadelphia Fed Business Outlook Survey jumped up to 27.9 from last month's 23.8. That's a 17.2% increase.
Not surprising to see the market hold steady. And it perfectly explains why stocks have been making new high after new high this year.
The trend is your friend. And the fundamentals suggest this trend has plenty more to go.
Best,
Kevin Matras
Executive Vice President, Zacks Investment Research
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