Everyday, Everyday I Have the Blues
By John Stoltzfus,
Chief Investment Strategist
Trend Analysis
Market Strategy Radar Screen Weekly - February 22, 2016
In this article:
- PPI
- OIL
- S&P 500
The Bull’s Got Legs, and It Knows How to Use Them
A posse of data and a firming in the price of oil sent markets higher
Stocks rebounded last week stateside as a veritable posse of economic data and a modest gain in the price of oil helped run off bearish sentiment in the first two days of the trading week as traders returned from the Presidents’ Day long holiday weekend.
The S&P 500 added 2.84% in the holidayabridged week, with solid gains on Tuesday and Wednesday helping the market shrug off some of the prior week’s losses and helping pretty much to ignore a near half-percent give-back on Thursday and a near-flat close last Friday.
From a stateside perspective it was a positive mix of economic data that included: an increase in mortgage applications; a better than expected housing starts number; a rise in the PPI (producer price index) along with respective upside surprises in industrial production and capacity levels for January that helped push stocks higher.
Based on data released last week, US manufacturing output in January showed the largest one-month gain since last July, a positive sign for the dollar-beleaguered manufacturing sector and for the economy. Total output, which includes activity in mining and utilities, increased 0.9% in January, beating economists’ survey expectations as well.
As of market close last Friday, the S&P 500 had rallied 4.85% from its 2016 low reached on February 11th.
Six of the S&P 500’s sectors (all of the cyclical sectors) outperformed the underlying benchmark and the defensive sectors. In the same period the defensive sectors each delivered positive performance but lagged the cyclicals and the underlying benchmark’s performance.
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