The past few years we have seen the market roar higher out of the gate only to suffer a sharp pullback as we enter the spring. A spike in the price of oil has been a major cause of that each time. As the price of fuel has spiked in each of the past few years we have all in effect suffered a tax hike.
The market’s recent shift back into economically sensitive assets tells us stocks could continue their surprising march higher despite the ongoing calls for “sell in May”. As shown in the chart below, the S&P 500 made no progress during the last twelve years. The “no progress” pattern was recently broken, which could lead to head-scratching gains in the months ahead.
The notion that silver has been recently trading more like a base metal is more a fallacy than fact. Some of the top technical analysts have been stating that the reason why the price of silver has not held up as well as gold is due to the fact that silver trades more like copper than gold.
It is graduation time, and this morning finds me swimming in a sea of fresh young faces as a young friend graduates, along with a thousand classmates. But to what?
The Advance Retail Sales Report released this morning shows that sales in April came in at 0.1% month-over-month, a strong improvement over the downwardly revised -0.5% in March.
Little doubt remains that China's export numbers are at best unreliable but more likely simply fudged.
The definition of hypocrisy given by the Merriam-Webster online dictionary is, “a feigning to be what one is not or to believe what one does not; especially: the false assumption of an appearance of virtue or religion.”
Global central banks around the world continue to push monetary easing like never before. The Fed and Bank of Japan currently combine for almost $180bn of monthly quantitative easing, an historic experiment in monetary inflation.
Although past performance is no guarantee of future performance, it strikes me that previous instances of tighter monetary policy did not trigger immediate widespread declines in equities...
The market is perhaps in the best shape it has been in over a year when looking at its trend and momentum. Perhaps the biggest development in recent weeks is the clear rotation away from defensive sectors and into cyclical sectors. This development is likely to propel the market even higher given 70% of the S&P 500 is made up of cyclical sectors. There is no erosion in either the market’s trend or momentum, and until we see erosion in the markets breadth and momentum the path of least resistance is clearly higher.
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