News / Economy

    US Stocks Have First Winning Streak of 2016

    FILE - A trader on the floor of the New York Stock Exchange.
    FILE - A trader on the floor of the New York Stock Exchange.

    Stocks opened for trade on Friday, aiming for their first four-day win streak of 2016. The first week of performance was simply stunning as the S&P 500 moved higher by nearly 60 points, following a blood bath in January and a flat February.

    Since the February 11 low of 1802, the S&P 500 has rallied over 200 points. The recovery in crude oil prices and participation on the upside from the financial sector lent to the bullish activity. Interestingly, gold also made a fantastic recovery, which leaves traders scratching their heads because equities and gold typically move opposite of each other.

    One reason could be tied to interest rates. Gold typically moves higher as interest rates move lower. In a very low-to-zero-to-negative interest rate environment, the run up makes sense. The equity rally could also be predicated on the fact a March rate hike appears to be out of the cards. But, if low interest rates are bad for the banks’ earnings and growth, why have the banks rallied?

    “Lower interest rates and improving demand out of China and India are factors in gold rally,” Phil David, Founder of PSW Investments, explains. “The Bank of Japan and European Central Bank continue to ease monetary policy, and gold is becoming a popular hedge for what feels like coming inflation.”

    Copper, also known as the “red metal”, jumped to its highest level in four months. Recall, China is the world’s largest consumer of copper.

    Based on certain technical indicators Jeremy Klein, Chief Market Strategist at FBN Securities, sees in the market, “Copper should undergo this technical phenomenon by early next week which would offer some much needed optimism for the Chinese economy. An improving fundamental environment could finally put the recent pullback further in the rearview mirror,” he said in a research report.

    Is this a powerful new uptrend or the climax to a counter-trend rally in the stock market? Just about every technical indicator suggests that the market is severely overbought. U.S. economic data has been mixed, while global data shows growth is slowing. Friday's Jobs Report headline number was strong, but wage growth is declining. Crude has moved higher, even though the over supply glut is as bad as it’s ever been. In fact, oil had its third weekly gain, a move we have not seen since May 2015! These are some of the themes traders are trying to work out relative to price action.

    “These types of extreme moves happen in volatile markets," Sander Read, President & CEO of Lyons Wealth Management said. "The important thing for investors to do is keep the longer-term in focus. We have been in consumer cyclical stocks and good dividend payers, which has helped our clients ride out the swings.”

    Trading Week Ahead: March 7-11

    The earnings calendar is virtually wiped clean, but there are a few names, mostly in the consumer sector that traders will have on their radar including; Shake Shack (SHAK), Dick’s Sporting Goods (DKS), Navistar (NAV), Dollar General (DG) and ULTA Salon, Cosmetics & Fragrances (ULTA). Even though there is little to watch in terms of corporate reports, there are several sell-side broker conferences taking place next week.

    It is important to be aware of when and where companies you are trading or invest in are presenting because management is notorious for throwing in tidbits on forward guidance or updates on the business, which can certainly move stocks and related sectors. In a recent example, yoga-pants giant Lululemon (LULU) announced in January updated guidance at the ICR Conference. Management stated that fourth quarter earnings and revenue expectations would be higher than the previous range given to the investment community. As a result, LULU shares traded 4 percent higher in after-hours trading.

    These are some of the larger conferences on tap:

    * Cowen & Co 36th Annual Healthcare Conference March 7-9

    * Deutsche Bank Media, Internet and Telecom Conference March 7-9

    * Piper Jaffray Technology, Media and Telecom Conference March 8-9

    * RBC Financial Institutions Conference Marc h 8-9

    * JPMorgan Aviation, Transportation and Industrials Conference March 8-10

    Economic data is relatively light this week. Crude oil and natural gas weekly inventory, Jobless Claims and Import and Export Prices are the most important reports to watch. While the U.S. is in a data “vacuum” next week, traders will be focused on some very key global data points, including China Foreign Exchange Reserves, China Imports/Exports/Trade Balance for February, China PPI and CPI for February, China Retail Sales and Industrial Production for January and Japan Q4 GDP.

    Klein maintains his bullish thesis for the stock market in 2016, "HFR performance data and open interest for the futures hint at the presence of a large hoard of cash on the sidelines. As stocks climb, institutions will feel compelled to plow their idle assets into shares especially as the excessive amounts of skittishness subside."

    You May Like

    Chechen Suspected in Istanbul Attack, but Questions Remain

    Turkish sources say North Caucasus militants involved in bombing at Ataturk airport, but name of at least one alleged attacker raises doubts

    With Johnson Out, Can a New ‘Margaret Thatcher’ Save Britain?

    Contest to replace David Cameron as Britain’s prime minister started in earnest Thursday with top candidates outlining strategy to deal with Brexit fallout

    US Finds Progress Slow Against Human Trafficking in Africa

    Africa continues to be a major source and destination for human trafficking of all kinds -- from forced labor to sexual slavery, says State Department report

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Anonymous
    March 04, 2016 8:09 PM
    Good article easy to understand. Keep an eye on COP starting to climb back up.
    In Response

    by: Jill Malanadrino
    March 05, 2016 5:21 PM
    Thanks for the feedback! Yes, the majors made quite the comeback last week. Be sure to sign up for alerts from my author byline. Most of reporting is commodity centric and I have some really great trading experts on with me or cited in my articles. Have a great weekend!

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Clinton Leads Trump, But Many Voters Don't Like Eitheri
    X
    Jim Malone
    June 29, 2016 6:16 PM
    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8980
    JPY
    USD
    102.64
    GBP
    USD
    0.7528
    CAD
    USD
    1.2923
    INR
    USD
    67.328

    Rates may not be current.