After all of 4 negative U.S market hours, all is back to 2012 normalcy as being ‘in the game’ theme takes over once again. Back to sounding like a broken record, but hey that’s what it continues to be as SP1370’ is seemingly a magnet as dip buying came around again at ES ~1333, not even waiting for SP cash to hit 1333/1327 trend-line from October’ 07.
The main driver today was the slew of upbeat eco’ data, although Greece headlines played a role simultaneously premarket. Note Italy/Spain yields were flattish premarket after previous day’s spike. So, despite ES sliding further overnight, there was 'yield' calmness in the air across the pond before any Greek headlines hit.
In all, today it was 'catalytic' news and not made up stuff to provoke an upside move as earlier in the week, which of course is a positive. Since ‘initial claims’ is a leading indicator, today’s move shows investors started looking ahead, specifically to the next NFP# (which lags) in March. (This is the biggest takeaway today). Throw in an improving Philly Fed survey later and it was off to the races with the weakest sectors last few days catching a bid as well, (industrials, materials, commodity linked stocks). This fresh upbeat tier 1 data is possibly a tailwind as it’s likely not priced in. A tired market needed something new and this could be it.
Only caveat today is RUT related, although the small caps outperformed the other major indices, momentum names and earnings plays only tacked on average par gains to the RUT. Still, this can change quite quickly and outperform everything else.