How Long Can This Go On?
Great question, I’m glad you asked…
OK, OK, let’s not get ahead of ourselves, especially coming off a day when most of the widely watched equity indexes put up a bunch of red numbers.But the S&P 500 is still less than one percent from a new all-time high. The 5,200 level, as Mish Schneider highlights in her Weekly Market Outlook, is a critical one right now.
And both Mish and Ryan Detrick noted on Monday that when December, January, February, and March close higher, April closes higher too.
That factor is even more pronounced during presidential election years.
“More sellers than buyers” is what happens sometimes, especially when investors, traders, and speculators are waiting for something that’s not happening until the end of the week, and on a market holiday no less.
Maybe some took note of Chicago Fed President Austan Goolsbee’s statement in an interview with Yahoo Finance Live that three rate cuts in 2024 are “in line with my thinking.”
Others may still have in mind Atlanta Fed President Raphael Bostic’s comment from Friday that he now projects a single rate cut this year, and later than he previously anticipated to boot.
As Goolsbee also said in response to a question about a June rate cut, “Everything is always on the table or off the table."
The question Mish asks in her Weekly Market Outlook is, of course, how long can this bullish trend continue, particularly in the face of higher market yields.
“So far that has been the case,” Mish notes.
Here’s the relationship to watch, according to Mish: As long as the S&P 500 is outperforming long-term US Treasury bonds, people are going to take that as a healthy sign.