ISM non-manufacturing readings from across the globe collectively showed the service side of the economy continues to expand. The better than expected data didn’t help the DAX and Nikkei too much and failed to spark the S&P 500 and Dow Jones Industrials to new highs. After last week’s push it is not too much of a surprise today’s action ended the way it did. This market continues to point towards higher prices and lacks any evidence of a potential market top. Leading stocks continue to move higher in support of a market looking to continue higher. Evidence suggests we aren’t about to see a market top any time soon. Unless, of course this changes there is no need to fight this trend. We continue to push higher and will continue sticking to the trend.
The Russell 2000 hit another all time high today finishing the green leading all major market averages. Finishing in the green along side the Russell 2000 was the NASDAQ. However, the Dow and S&P 500 finished in the red. Industrials along with Oil & Gas names weighed on the S&P 500 today. Technology stocks provided the boost as AAPL is fighting to get off its most recent lows. The only negative to this market is a lack of volume. However, each new high has come in light trade. Perhaps when we really should worry is when volume soars at all-time highs. At any rate, this market hasn’t given a clue (price wise) of a downtrend yet and we aren’t about to guess when this will occur.
Two charts from FRED will show you why we do not have any inflation (according to the Government). When all your money goes to excess reserves it will not find its way into the economy. Supporting this argument is the Velocity of Money. Until there is a fundamental shift, these two items will likely keep inflation at bay.
There isn’t much economic news other than our normal weekly releases to have fun with, but there are still a few Fed speeches. I would hardly doubt anything substantial would be brought to the market’s attention. Why upset the apple cart? We continue to see an absence of sellers in this market and why we do not have any evidence of major distribution. Another decent start to the week; let’s ride our winners.
