The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Steady rise.
Overnight news wasn’t inspiring and overseas markets were mixed. Our futures traded off modestly in the premarket but trended up after 2 AM. The S&P opened down 20 points and rallied immediately, crossing into positive territory 5 minutes later. The index rallied further after various manufacturing data showed strength both in the US and globally. The rally was fairly broad and the Mag 7 was split. Consumer staples and industrials led among the sectors, with energy lagging. Yields climbed again, not bothering stocks however. Precious metals appear to have stabilized. Capital flow was high at 120%.
We’re in the midst of another US government shutdown. For the moment, markets are unconcerned. We won’t see January nonfarm payrolls Friday as a result but considering the stability of the macro data and the fact that markets expect no Fed changes until there’s a new Fed Chairman, the missing labor data won’t bother too many people. It’s hoped that the shutdown will end next week. If that’s the case, the shutdown will have negligible impact. If this thing goes on longer, the market is going to get more and more concerned…. who knows how patient markets will be.
One thing’s for sure, if/when the market loses patience, politicians get moving and dip-buyers take advantage. I’m positive there are dip-buyers out there hoping for some typical foot-dragging out of D.C. and subsequent selloffs in stocks.
Today’s bullishness has no clear cause. It might be noise or it might be a signal that the market is still allocating capital into stocks. There might be a rising tide at work. It’s not exciting but it’s consistent. New all-time highs are only about 25 points away, a trivial amount. It looks like investors are in calmly in motion lifting offers. They probably won’t stop without a zinger of a negative catalyst.
See you tomorrow.
-Mike
Visdom Market Commentary
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