From the Fed, from Congress and President, and from Europe for starters. Chairman Bernanke may give us the former as he testifies on Tuesday and Wednesday this week. Congress must act by Friday over the sequestration issues. And Italy could’ve helped a bit today if its election resulted in a more stable government, although that does appear to be happening.
January was a good month for the market as the S&P 500 reached a new 5-year high at 1498, up about 5% for the month. February has started strong, up yet another 1%. Mid-caps dominated the month along with Small-caps, but no style/cap did poorly. For the month, the leading sectors were Healthcare, up a whopping 9%, as our forward looking SectorCast had predicted, along with Industrials, up about 8.5%, followed by Financials and Energy, up about 8%.
The Fed has enacted QE3 with an indefinite time deadline. Europe continues to make progress after Draghi’s bond buying announcement and Chancellor Merkel’s reaffirmation. The market has noticed and responded with a strong upward movement in each of the past two weeks.
Technology led today’s robust rally as the dollar continued to weaken. Financials, especially banks, remained strong the first three days of last week then fell to profit-taking on the final two days, ending down a little more than -0.5% for the week. Today, that sector regained all of that loss and advanced an extra 25 basis points to reach near multi-year highs, although it is still more than 50% off its early 2007 high.
The last several weeks have brought a steady flow of small but important improvements in the domestic economy (see summary below), but investors have shunned risk, keeping the markets spiraling downward.
From the Fed, from Congress and President, and from Europe for starters. Chairman Bernanke may give us the former as he testifies on Tuesday and Wednesday this week. Congress must act by Friday over the sequestration issues. And Italy could’ve helped a bit today if its election resulted in a more stable government, although that does appear to be happening.