Stocks around the world were higher today. China started things out with nearly a 1% gain, European markets gained 1%+ and the US market gained 1.5% – 1.9%, depending on the index.
Gold continues its decline, down 1.75%; oil was up and bonds were down.
This is probably a melt-up in stocks as those betting that the market had topped out and was rolling over have to cover their short trades. This is the fifth day in a row for a market advance and the best day of the run. At some point, short sellers have to throw in the towel before losses get away from them. It was also significant that the market hit a new high for the year and once that happened, buying kept coming in throughout the day.
Some will say it was retail sales that were responsible for the market advance but no, while it was a good report, it’s more a matter of what I just described. The Fed had nothing much to say, the Greek deal is done and economic news continues to be good.
We’ll see if it lasts. We had a similar run last year during the first two quarters but that reversed sharply during the summer. Things that might cause that this time are another reversal of economic news like happened last year, war with Iran or a renewed focus on troubles in Europe. Rest assured that Europe will have bad news off and on throughout the year. Whether it will move world markets when the focus is back there again remains to be seen. Greece will be back for more money, Portugal is as bad off as Greece and Spain has severe problems that haven’t gotten much attention.
For now, enjoy the ride. It’s nice to have as good a first quarter as we have enjoyed. I’m certainly not complaining.