Stocks Shrug Off Economic Reports Amid Buying Follow Through
This is an abridged version of our Daily Report.
Shrugging off disappointment
Economic reports haven’t kept up with economists’ outlooks, but it hasn’t mattered as the S&P 500 has rallied to all-time highs. When stocks hit a 200-day high and economic surprises a 200-day low, future returns were good. They were even better when economic surprises were positive, though.
Once more, with feeling
After ending a long stretch without a 52-week high, the S&P followed-through on Monday with a large gain.
A day of follow-through improved future returns, especially when that follow-through day was larger than 0.75%.
Short covering
The Optimism Index on gold has moved above 30 after dropping below 20 in the past week. There have been five similar signals since 1991, leading to a positive return over the next three months four times, with one minor loss.
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