The 1000 point rally. To finish off yet another week of gains, the S&P 500 closed at 1666. Why does that number mean so much? Just over 4 years ago the S&P was 666 - a cool 1000 S&P points in 4 years and 3 months; remarkable really. These last 100 points have come almost at a breakneck pace; in about 4 weeks. While Wednesday and Thursday brought us a bevy of poor economic news (which the market mostly brushed aside), Friday there were some good data points. And when you cannot get the market to go down on bad news, you can see what happens when there is good news. The S&P 500 gained 1.03% and the NASDAQ 0.97%; much of this came in the last hour or so as the market has been rallying almost every session after 3 PM. It is now up 17 of the past 21 sessions and 10 of the past 12.
Stocks pulled back for just the 2nd session out of 11 (and 4th out of 20!) - losses seemed somewhat strong but that is only because we have become used to stocks up almost every day and when they fall it is of the 0.1% variety. Economic news was quite bad for a second day in a row - in the past 2 days there have been about 9 economic reports domestically and 7 could be characterized as misses. And for all that you have the most minor of pullbacks. Today's losses were not even due to the economic data (the market had been up much of the day) but due to comments from another Fed member about 'tapering' of QE purchases in the future - this is going to be a running theme go forward. The S&P 500 fell 0.5% and the NASDAQ .18% as a surge post earnings in Cisco Systems (CSCO) helped the latter.
If the market is getting repetitious it is not just you. The S&P 500 is up 9 of the past 10 days (and the down day was meager) and up 13 of the past 16 days. That's 80%+ of the days during the past month. The daily sector rotation continues and Wednesday the defensive sectors that have been pushed aside the past few weeks made a return to the action. The daily economic news is now almost meaningless to the market as we saw a few reports today such as the NY region manufacturing report that came in below expectations - but no one really cares. At some point actual data will matter again but not right now. The S&P 500 gained 0.51% and the NASDAQ 0.26%.
As mentioned the past few days the market was internally correcting even though the indexes were not going down much. We could see this as the NYSE McClellan Oscillator dropped nearly 40 points and various sectors retreated as others took their place as daily leaders. So the market corrected via time (sideways) rather than price. That set up Tuesday's action where a catalyst in the name of hedge fund manager David Tepper drove the market to new gains. Who is this man? Back in September 2000 as Quantitative Easing program #2 was on deck, he came to CNBC and said either the market will go up due to a better economy OR the market will go up due to the Federal Reserve. He said it was a time to be "balls to the wall" aggressive - for those around back then you know what happened; the market rip roared for months on end until QE2 ended. Well now we are in QE infinity so investors were interested in his take. Let's just say he was no less bullish today than he was in 2010. The S&P gained 1.01% and the NASDAQ 0.69%.
A better than expected (but still weak) retail sales report helped keep stocks elevated as the market works off an overbought condition by going sideways rather than down. This data continues the "Goldilocks" scenario - not too hot (to make the Fed go away) and not too cold (to have anyone worry about the economy). The S&P 500 gained less than 0.01% while the NASDAQ added 0.6%.
Retail sales rose 0.1 percent in April, better than the 0.3 percent drop that had been expected and returning to growth following a decline in March. Excluding autos, gasoline and building materials, core sales rose 0.5 percent.