The joyride to the upside in the stock market continued last week as the S&P 500 surged another 2.5%. If my calculator is correct, this means the venerable blue-chip index is now up 10.7% so far in 2019 and has put in a nifty gain of 18% since the December 24th panic attack. Impressive.
What is perhaps even more impressive from my seat is the reversal in Ms. Market's mood. Recall that back in December, traders assumed the worst. Everything was negative. There was nothing positive to be found anywhere. All news was bad news. Even the good news (record holiday shopping for example) was ignored because the markets were doomed. The Fed had lost its way. The administration was planning to flush the hundreds of billions it spent on tax cuts down the drain with the trade war. And the "R-Word" (recession) dominated the global view. Insert sad emoji here.
Now fast forward eight weeks. The S&P has soared. The index is back above its 200-day moving average. There is talk of a new bull market. I'm getting calls about keeping up with the stock market again. Everything is good. Nothing is bad. And any news that happens to fall in the disappointing category can simply be ignored. Amazing what an 18% gain in a couple months can do, right?
The Game Changers
Why the sudden mood swing, you ask? Easy. Because the Fed changed its tune and leaders in both China and the U.S. want a deal. As such, it is now assumed that the economies of the world will resume their long-lost upward mojo. So, the real question becomes, how long until we start hearing the words "synchronized global growth" again?
It appears that traders are now assuming the Fed will thread ...
