STTG Market Recap March 4, 2014

You can’t keep a good market down.  After a 1 day selloff, markets came roaring back today – gapping up at the open and grinding higher all session.  Comments from Putin seemed to lessen tensions.  Dip buyers have been trained to buy every dip as well, as we have a long litany of these type of crisis – Syria, Egypt, etc.  The S&P 500 gained 1.53% and the NASDAQ 1.75%.

Reported comments by Vladimir Putin that the Russian president had called troops taking part in military exercises close to Russia’s border with the Ukraine back to their bases helped calm worries of an immediate escalation of military force.

The indexes continue to look very good.

spx

nasdaq

Let us also highlight the Russell 2000 today (which focuses on smaller companies), as it had a monster day up nearly 3%.  Seeing this as a leading index is usually a good sign.

rut

10 year Treasuries fell, pushing yields up from that 2.6% range yesterday to 2.7% as the “risk on” trade came back.

tnx

One area that continues to lead here are the homebuilders – the ETF took a hit yesterday but is building a high level flag.

itb

The airlines – which were one of the huge winners of 2013 – continue to perform this year as industry consolidation has created a beautiful oligopoly.   Delta is already up 26% this year!

Delta, the world’s second biggest airline behind United, said Tuesday that traffic rose 2.4 percent last month, as passengers flew 13 billion miles.  Delta said that revenue for every seat flown one mile rose 4 percent from a year ago. That statistic is watched closely in the airline business, and it rises when airlines put more people on each flight or raise average prices.

dal

There was an interesting story regarding Facebook (FB) today as the company is looking to buy a drone company to provide internet access in areas that do not have it.

Facebook Inc is in talks to buy drone maker Titan Aerospace for $60 million, according to media reports.  The high-flying drones would give Facebook, the world’s No.1 Internet social network, the ability to beam wireless Internet access to consumers in undeveloped parts of the world, according to the technology blog TechCrunch.   The effort would help advance Facebook’s Internet.org effort, aimed at connecting billions of people who do not currently have Internet access in places such as Africa and Asia.

fb

BeSpoke has an interesting chart indicating this is a good time to buy (and to sell on Easter).

The table to the right lists the performance of the S&P 500 from the close on Fat Tuesday through Easter over the last 25 years. As shown in table, the S&P 500 has risen an average 2.04% (median = 2.37%) with positive returns 72.0% of the time. This is pretty much right in line with the average going even further back to 1945, where the S&P 500 has averaged a gain of 2.08% with positive returns 69.6%. More recently, in the current bull market the S&P 500 has risen during Lent every year for an average gain of 5.1% (median = 3.3%). There’s an old market axiom that says that investors should sell on Rosh Hashanah and buy on Yom Kippur. Perhaps a Christian corollary to that saying is buy on Ash Wednesday and sell on Easter.

Bespoke

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