US Bull Market Heating Up Again, as YTD Gainer Hits 22%

US Bull Market Heating Up Again, as YTD Gainer Hits 22%

$DIA, $SPY, $QQQ, $RUTX, $VXX

  • NAS Comp +26.4% YTD
  • S&P 500 +22.3% YTD
  • Russell 2000 +17.9% YTD
  • DJIA +17.2% YTD

This Bull may be old but it is not tired.

A Bull market that traces its lineage to the depths of the financial crisis has marked its 4th straight weekly gainer and pushing its gain in Y 2019 above 22%.

After consolidating mid-year during the US-China trade dispute and recession anxieties, American stocks are back in melt-up mode, ending 3 of the past 5 sessions at a record.

While nobody knows if it is getting late for this 10 yr-old + rally, gains like these have been common at the tail end of bull markets past.

A study by Bank of America Corp. on equity peaks since Y 1937 shows that being uninvested in the last year of an advance meant foregoing 20% of the rally’s overall return.

The S&P 500 powered to a new record Friday after an unexpectedly strong jobs report offered hope that the labor market can propel consumers to keep spending and extend the record-long expansion despite weak business investment and trade tensions.

Stocks got a brief boost and the USD pared losses after China’s Ministry of Commerce said trade negotiators had achieved a “consensus in principle” with the US.

The latest economic data come after the Fed lowered rates Wednesday and signaled it is unlikely to make further changes, up or down, any time soon. That sent stocks to a record, before a batch of weak economic data and renewed worries over trade weighed on the measure Thursday.

The S&P 500 is up 1.5% on the week. Fed Vice Chairman Clarida reiterated in an interview that monetary policy is “in a good place” and the consumer is strong.

The jobs report “reinforces the thesis that the economy is hanging in there with steady growth thanks to the consumer, jobs, low rates, strong housing and that the global picture is weak,” said the managing director of Global Markets Research at FTSE Russell.

Friday’s good news on the trade front follows a tough Thursday session that saw markets rattled as Chinese officials cast doubts about reaching a comprehensive long-term trade deal with the US.

In earnings news, Exxon Mobil and Chevron reported solid results, while Alibaba Group Holding Ltd. rose after its report. European bonds slipped. Oil edged higher though headed for its biggest weekly loss in a month on swelling American stockpiles.

Earlier, risk sentiment got a boost from better-than-expected Chinese manufacturing data, even as uncertainty remains over an interim trade deal. Gold fell after a 1% rally Thursday.

“Markets participants, as well as maybe even the Fed, have been very optimistic” on the trade truce, chief US economist at Pacific Investment Management Co said on TV, “We can see some more deterioration there.”

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 1% as of 4 p.m. New York time.
  • Th Dow Jones Industrial Average added 1.1%.
  • The Stoxx Europe 600 Index gained 0.8%.
  • The MSCI Asia Pacific Index gained 0.3%.
  • The MSCI Emerging Market Index advanced 0.7%.

Commodities

  • Gold futures flat at $1,510.70 oz,
  • West Texas Intermediate Crude Oil gained 3.5% to $56.10 bbl.

The Trump Policies are working.

HeffX-LTN’s overall technical outlook for the US major stock market indexes is Bullish to Very Bullish for the week ended 1 November 2019.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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