The S&P500, scoring a second new high in as many days, reveals the strength of the ongoing expansion. Now 1,311 trading days since the March 2009 bottom, prices show no sign of weakening. Indeed, today’s close -the fourth straight advance-has happened just 40 times since 1996. Note that all but three occurred in bull markets -and today’s is the fourth such close this year.
It should not be surprising if tomorrow’s market will close down -especially since there have been just five consecutive up days.
It is reasonable to believe that lower interest rates contribute to the market’s strength. The S&P50i0 has gained 5.3 percent since April 1; during this same peeriod the Ten Year Treasury interest rate has declined from 2.76 percent to 2.52 percent. That markdown amounts to some 8.8 percent from the April rate.
Today’s diagram reveals this close correlation. That means despite the emphasis by the Fed, and market observes, that credit tightening looms in the future, the opposite in fact is occuring.
DJIA + .42 percent
NASDAQ +1.22 percent
S&P500 + .60 percent
