Market opens higher again, looking for the first 3-day win streak in 2016. That in of itself says a lot about the start to the year. The correction which really started last Summer has done tremendous damage to the stock and junk bond markets. There has been substantial stress in the financial system. After hitting a double bottom in the low 1800’s on the S&P, things are healing a bit. There has been a 15% correction in price from the Spring 2015 peak to the trough of last week. It has reminded us of 2011, not 2008. There has been stress relief and the price action has improved. The healthy cleanse has taken its toll. Investor sentiment is very low. The sell-off has been brutal in certain areas. Many stocks are just bargains now. We don’t think we are quite out of the woods yet, but things are getting better. Crude is getting a lift in early trading. Interest rates are higher too. The Dollar has actually weakened in recent weeks. Iran isn’t going to comply with the oil production freeze. US housing starts slowed in January. The Fed releases its minutes from the January meeting. It’s another day in 2016.
Have a great day.
Mike
