March Madness Continues for US Markets
After an 8 day winning streak, the markets finally slipped back on Friday, but still ended the week in positive territory. The Dow was up 1.1% for the week, the S&P 0.86%, and the Nasdaq 0.29%. The last time the markets had a 9 day winning streak was 1996.
The Dow’s gains represent its longest positive run since late August 2009, and many stocks are hitting fresh 52-week highs. On Wednesday alone, some 1,231 of them did so. In a positive sign of investor optimism, the Chicago Board Options Exchange Volatility Index (commonly regarded as a gauge of fear) fell below 17 last week – for the first time since May 2008. We also saw the dollar slide against higher-yielding currencies, giving further evidence that investors are leaving safe-haven investments in favor of riskier assets.
The Dow is up over 62% since its March 9th, 2009 bottom, 3% for the year, and 4% for March. “It’s been subtle – almost silent – and yet here we are at new highs,“ said Mark Luschini, Chief Investment Strategist for Janney Montgomery Scott. “It certainly doesn’t feel like the market’s climbing by leaps and bounds, but very subtly, we’ve gained 10 points here, 30 points there.”
Despite its recent winning streak, the Dow is still nearly 700 points from its close before the Lehman meltdown, leaving us a lot of ground to make up. In imitation of the famous tortoise from Aesop’s fable, let’s hope the markets keep up their slow-and-steady advancement.
Key things we’ll be watching this week:
Tuesday – Existing Home Sales, Redbook
Wednesday – Durable Goods Orders, New Home Sales
Thursday – Initial Jobless Claims, Fed Balance Sheet
Friday – GDP, Corporate Profits, Consumer Sentiment
.
HIGHLIGHTS:
A transformative health care bill is headed to President Barack Obama for his signature as Congress takes the final steps in Democrats' improbable and history-making push for near-universal medical coverage. Obama cast the debate as a war over whether the U.S. health-care system works better for the insurance companies or for consumers, and said that the bill is a "patient's bill of rights on steroids."
The Federal Reserve kept its benchmark interest rate at a record low level Tuesday and made no changes to the key "extended period" policy pledge, a signal that it believes the economy still needs support to get to a sustainable path.
Four additional banks in Georgia, Alabama and Minnesota were closed by regulators Friday, bringing the national total to 37 for the year to date.
Sources:
Marketwatch
The Wall Street Journal Online
http://www.marketwatch.com/story/fed-stands-pat-on-rates-wording-2010-03-16
http://www.marketwatch.com/story/obama-to-push-health-care-bill-ahead-of-key-vote-2010-03-19
http://www.marketwatch.com/story/consumer-price-index-flat-in-february-2010-03-18
http://www.marketwatch.com/story/four-more-bank-failures-bring-2010-tally-to-37-2010-03-19
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