The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Keep buying.
Futures were flat as we waited for the inflation data. PPI ex food & energy (3.6% vs 3.3% est & 3.7% prior revised from 3.5%) told a similar story to CPI the day before but markets didn’t worry about this print at all. Futures barely swung around and rose some as we approached the open. Treasury yields were already a bit lower and continued in that direction over the day. The bulk of the bulls’ work took place during regular trading hours. The S&P 500 opened +15 and climbed to +40 by 11 AM. Lunch trading was quiet and bulls reasserted themselves in the afternoon. The index was +60 by the final hour. Flow was higher than usual, 108%.
Stock investors pushed the S&P up and recovered all the losses that occurred since the DeepSeek drop. The dip-buyers win again. It took them almost three weeks to do their thing this time. The index has traded flat since mid-November and the longer-term trend appeared stalled. The latest push higher suggests that the market is done with the consolidation and is ready to resume the bull market. The news of late hasn’t been compellingly bullish. The upward momentum isn’t rooted in a fundamental development on the investment landscape. The move has simply materialized on its own. That means investors like the general environment, plain and simple.
Is the general environment stable? Last year the answer was clearly yes. Right now, I’m not so sure. Tariff talk doesn’t strike me as a calming influence. Recent hot inflation prints don’t assure me that the future is fine. The trend higher in interest rates looks to continue.
I don’t see that mix as being great for the bulls, but the market disagrees. Stocks are climbing and the chart points higher. People are buying stocks, period. They don’t need to explain themselves.
See you tomorrow.
-Mike
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