A large number of economic releases came out this morning with 11 of the 12 beating estimates and some well above expectations. Also, durable goods, new home sales, consumer confidence, and manufacturing all trended higher this month, with consumer confidence and new home sales near 5-year highs.
The Citigroup Economic Surprise Index also bottomed earlier this month and has started to creep higher, with today's data pushing it back into positive territory.
As of this morning, the S&P 500 is up slightly by 0.76%. The market experienced a modest correction last week when Fed Chairman Ben Bernanke commented on possibly tapering stimulus due to a strengthening US economy. With weakness still being felt around the globe, the market is unsure whether any withdrawal of stimulus by the Fed may be premature and lead to further economic contraction.
If economic data continues to beat expectations and appears sustainable, this will help remove the uncertainty of any change in Fed policy.
Technically speaking, the market has broken through its 50-day moving average and is now expected to trend back towards its 200-day moving average, which at slightly above 1500, would mean the market may still correct at least another 4-5% from current levels before finding support.