Stocks gapped up at the open and held gains all session as the holiday animal spirits + news Sunday that Apple finalized a deal with China Mobile to start selling iPhone 5s in the country by mid January. The Commerce Department said consumer spending rose 0.5 percent after advancing by a revised 0.4 percent in October. It was the seventh straight month of increases and matched economists' expectations. The Thomson Reuters/University of Michigan index on consumer sentiment came in at 82.5, unchanged from November.
Stocks closed Tuesday with losses, putting together a rare 3 day losing streak; only the second since September. The S&P 500 fell 0.32% and the NASDAQ 0.2%. So while we are in day 3 of a pullback, this is very mild. There was a break in economic news for the day but it gets hot and heavy the rest of the week.
The S&P 500 closed below its 10 day moving average for the second time early October - that shows you how strong this trend has been. The only other time was the outside reversal day marked in yellow; that was immediately followed by a sharp rally. The NASDAQ continues to pull back from the top of the year long channel it has been in; it hit the top of it Friday.
A late day selloff knocked the S&P 500 back to near break even but after lagging for a few weeks money has rotated back into tech stocks and small caps. This is a hallmark sign of a major bull market - constant rotation. The S&P 500 gained 0.01% and the NASDAQ 0.58%; for those who like round numbers the NASDAQ broke back over 4000 for the first time in 13 years. A good report on building permits - at a 5 year high - helped lift the housing sector out of recent doldrums. The Commerce Department said building permits jumped 6.2 percent to a seasonally adjusted annual rate of 1.03 million units. That was the highest rate since June 2008. Economists had expected building permits at a 930,000-unit rate in October. Permits increased 5.2 percent in September. August's permits were revised to a 926,000-unit pace from the previously reported 918,000 units. Permits lead housing starts by at least a month.
Tick tock. Another day the market is open and goes up. Essentially the same story as the entire month of October - there have only been 2 down days since this rally began in the S&P 500. The S&P 500 gained 0.56% and the NASDAQ 0.31%. Nothing really new to add to the overall market analysis here; we are in a major uptrend of parabolic nature, and you are seeing rotation under the surface as different groups take turns being leaders each day. No one is worried much about tomorrow's Federal Reserve decision as there is zero expectation of nothing but full steam ahead from the Fed. IBM was a highlight today as the massive DJIA component announced a huge $15B addition to its buyback program. The only major economic report on the day were monthly retail sales - they were above expectations but mostly due to iPhone sales...
Stocks were extremely quiet ahead of the Apple (AAPL) earnings report, and a Federal Reserve meeting Tuesday and Wednesday. Everyone expects status quo from the Fed but the market is so extended ahead of the release of comments, maybe some people are a bit cautious. It was very much like a holiday session with little volatility and volume. With no major catalysts the rest of the year we might see a lot of days like this. The indexes continue to hover at highs while they wait for some supporting moving averages to catch up from this parabolic 3 week run. The S&P 500 gained 0.13% while the NASDAQ fell 0.08%. There were two economic reports on the day, both completely ignored by the market as it's in a QE induced stupor.