Market Direction: BULLISH alert
issued 2/15/2018
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.
Rising bond yields good or bad?
U.S.
stocks rose Wednesday, with major indexes advancing in a broad rally as investors
appeared to shake off fears of rising bond yields, helping equities resume a
recent uptrend.
In
a notable milestone for the day, an index of small-capitalization stocks jumped
to a new record, extending a recent stretch of outperformance by
small companies relative to their larger peers.
What did the main benchmarks do?
The
Dow Jones Industrial Average DJIA, +0.25% rose 62.52 points, or 0.3%, to
24,768.93. The blue-chip average has risen in nine of the past 10 sessions.
The
S&P 500 index SPX, +0.41% was up 11.01 points, or 0.4%, to
2,722.46. The day’s gains were broad, with nine of the 11 primary S&P 500
sectors ending higher. Materials were the top performers of the day, closing
1.2% higher, while consumer staples and consumer discretionary stocks both rose
0.8%. The two declining sectors — utilities and real estate — are seen as ones
that underperform in periods of rising bond yields, as their
higher-than-average dividend yields become less attractive to income-seeking
investors.
The
Nasdaq Composite COMP, +0.63% advanced 46.67 points, or 0.6%, to
7,398.30.
The
small-cap benchmark Russell 2000 index RUT, +1.00% hit an all-time high of
1,620.64. The index also closed at a record, ending at 1,616.37, a gain of
16.03 points, or 1%.
What drove markets?
The
day’s gains came despite the continuation of a few headwinds that have recently
pressured trading, including in Tuesday’s session, where equities fell broadly.
The yield on the 10-year Treasury note TMUBMUSD10Y, +0.69% rose to a seven-year high of 3.093%. The day’s action
extended its move above 3%, which has been cited as a psychologically
significant level that could make equities appear less attractive.
In
addition, there was some political uncertainty surrounding North Korea, after
Pyongyang overnight signaled its leader, Kim Jong Un, might pull out of next month’s summit with President
Donald Trump if the U.S. insists on denuclearization for the isolated nation.
What were strategists saying?
“For
the 10-year, 3% isn’t a magical number that will pull investors out of stocks.
With inflation and interest rates being where they are, we think stock
valuations are about right. Equities certainly aren’t cheap, but valuations
aren’t a big concern right now,” said Anthony Saglimbene, global market
strategist at Ameriprise.
Despite
that, he struck a note of caution, saying it might be difficult for stocks to
break out of their recent trading range and strike new highs.
“Investors
seem less willing to push valuations higher than they used to be. We’re in
something of a ‘show me’ environment, where simply meeting expectations isn’t
going to be enough to lift prices anymore.”
Lisa
Erickson, head of the traditional investments group at U.S. Bank Wealth
Management, said:
“Recent market action reflects a balance between risk and
reward for investors. On the positive side, there is still growth momentum and
solid earnings. But these are counterbalanced with risks on policy issues,
trade talks and geopolitics like North Korea.”
Behind the Scenes of North Korean Diplomacy
What economic news was in focus?
Construction on new houses dropped 3.7% in April.
The annual rate of new homes being built declined to 1.29 million last month
from a revised 1.34 million pace in March that was the strongest since
mid-2007.
Industrial production rose 0.7% in April,
slightly above Wall expectations of a 0.6% increase.
Check
out: MarketWatch’s Economic Calendar
What did other markets do?
Gold
futures GCM8, -0.06% rose slightly on the day, but that
was enough to give it its first gain in four sessions.
European
stocks SXXP, +0.21% ended modestly higher on the day,
while Asian markets finished flat to lower.
Oil
futures CLM8, +0.03% lost ground, dropping 0.2%, and the
ICE U.S. Dollar Index DXY, +0.04% gained 0.1%.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.
The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (2/15/2018)
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Dow
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up 599.98 points a 2.38% gain
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2/27/18
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Nasdaq
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up 181.66 points a 2.50% gain
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3/13/18
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S&P 500
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up 70.70 points a 2.59% gain
|
3/13/18
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Related Link: http://www.stockmarket-direction.com/
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