Mike’s Morning Brief – March 2, 2016

Market opens lower after a stellar start to March.  All 3 major indexes jumped over 2%, marking the best monthly start in over 3 years.  Importantly, the rally yesterday was broad based, and our conviction is growing that the correction has nearly run its course and will lead to a much better H2 for stocks.  The DOW and S&P are still down roughly 3% on the year, but it’s a far cry from down 10%, and 15% from the highs last Spring.  Interest rates jumped higher, showing money has flowed out of bonds and into stocks for the first time this year.  That’s a key indicator.  The 10-Year Treasury yield is back to 1.84%, after a visit to 1.5%.  Crude jumped over $34 yesterday, and is consolidating the strength in early trading.  Global Markets were mixed overnight, but China was strong, despite a credit downgrade.  Indications are the Fed is going to sit back for a while and wait on rate hikes.  Foreign central banks are continuing to provide stimulus aggressively.  Stocks are liking it.  Super Tuesday showed that it is very likely we’re looking at a Hillary vs Trump election in November.

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