Stocks Continue Their Advance
Stocks continued their recent advance yesterday as the path of least resistance once again appears to be to the upside. The bulls continue to make their presence felt despite the largely adverse macro headlines as the latest rally has now pushed the S&P 500 back to within a stone’s throw of its recent highs while the Midcap index closed at a new all-time high.
Once again, there did not appear to be any single headline or driver to Wednesday’s move higher. There was talk of an uptick in risk appetites on a global basis as well as the usual end-of-quarter window dressing (recall that the moves at the end of the quarter tend to mirror the overall direction of the quarter). In addition, the upbeat numbers from the ADP Payrolls report as well as the takeover talk surrounding Cephalon (CEPH) were also seen as positive contributors.
From a chart perspective, while the Smallcaps and Midcaps broke out to new highs, the S&P, NASDAQ and Dow still have some work to do in order to return to the previous highs for this bull market cyce. It is also worth noting that there is some resistance overhead on the charts of the blue chip indices. However, given that the leaders are stepping out to new highs, we would be inclined to view this as a potential precursor to the next move in the major indices.
Turning to this morning… Things are fairly quiet as we await the Weekly Jobless Claims numbers and more importantly, tomorrow’s monthly Jobs Report. And despite another downgrade of Greek banks and spreads widening in some of the PIGI’S, stock futures are holding up pretty well at the present time.
On the Economic front… Initial Claims for Unemployment Insurance for the week ending 3/26 fell by 6K to 388K. This was a smidge above the consensus estimate for 379K but below last week’s total of 394K, which was revised higher from 382K. Continuing Claims for the week ending 3/19 came in at 3.714M vs. 3.700M and last week’s 3.765M.
David D. Moenning
Editor: The Daily Decision
