Stocks and other risk assets enjoyed healthy gains in the first quarter of 2012 as the U.S. economy continues to improve and the EU debt woes have eased materially. For the quarter, the Nasdaq composite surged nearly 19% which was its strongest quarter since 1991! The benchmark S&P 500 jumped nearly 12% or its best quarter sine 1998! Meanwhile, the Dow Jones Industrial Average rose 8%. From our point of view, the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.
U.S. MFG Data Lifts Stocks:
Risk assets rallied on the first trading day of the second quarter after the latest round of economic data was mixed from across the globe. The official Chinese manufacturing data topped estimates but the HSBC manufacturing survey missed. U.S. mfg data also topped estimates which bodes well for the ongoing economic recovery. The ISM said its mfg index rose to 53.4 in March. However, not all the news was bullish. The Commerce Department said construction spending slid -1.1% in February which was the largest decline in 7-months and missed the Street’s estimate for a gain of +0.6%. The big miss came from Europe. The euro zone’s manufacturing sector fell for an eight month and at a faster pace in March which bodes poorly for the EU economy. It was also worrisome to see that the euro-zone’s unemployment rate vaulted to its highest level in almost 15 years! The fact that stocks rallied on the news bodes well for this rally and illustrates that the bulls are clearly in control at this point.
Market Outlook- Confirmed Rally
Risk assets (mainly stocks and a slew of commodities) jumped after a very shallow pullback, led higher by U.S. equities and agriculture commodities. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if sellers show up and support is breached then the bears will have regained control of this market. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!
Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
Stocks Rally on 1st Trading Day of Q2
Monday, April 02, 2012
Stock Market Commentary:
Stocks and other risk assets enjoyed healthy gains in the first quarter of 2012 as the U.S. economy continues to improve and the EU debt woes have eased materially. For the quarter, the Nasdaq composite surged nearly 19% which was its strongest quarter since 1991! The benchmark S&P 500 jumped nearly 12% or its best quarter sine 1998! Meanwhile, the Dow Jones Industrial Average rose 8%. From our point of view, the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.
U.S. MFG Data Lifts Stocks:
Risk assets rallied on the first trading day of the second quarter after the latest round of economic data was mixed from across the globe. The official Chinese manufacturing data topped estimates but the HSBC manufacturing survey missed. U.S. mfg data also topped estimates which bodes well for the ongoing economic recovery. The ISM said its mfg index rose to 53.4 in March. However, not all the news was bullish. The Commerce Department said construction spending slid -1.1% in February which was the largest decline in 7-months and missed the Street’s estimate for a gain of +0.6%. The big miss came from Europe. The euro zone’s manufacturing sector fell for an eight month and at a faster pace in March which bodes poorly for the EU economy. It was also worrisome to see that the euro-zone’s unemployment rate vaulted to its highest level in almost 15 years! The fact that stocks rallied on the news bodes well for this rally and illustrates that the bulls are clearly in control at this point.
Market Outlook- Confirmed Rally
Risk assets (mainly stocks and a slew of commodities) jumped after a very shallow pullback, led higher by U.S. equities and agriculture commodities. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if sellers show up and support is breached then the bears will have regained control of this market. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
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