Market opened higher again after yesterday’s gains were the strongest in 3 months and took the major indices to fresh new highs. DOW 24K is within reach. It started the year below 20K. It’s been just an unbelievable run with no mean reversion since the Summer. The Stock Market just doesn’t want to go down. It’s impressive but not healthy behavior. The S&P 500 has now gone 63 straight weeks without a 2% decline. It is well on its way to 64 with yesterday’s move. That is the longest stretch since 1965. But this is like no other year in so many respects. It is a very rare situation in 2017 with this Market resilience. “Buy the Dip” has been the rallying cry and it has absolutely worked. Consider the explosive strength yesterday, despite the North Korean missile launch and claim that their nuclear program is complete. The Market just doesn’t care. Goldman is out with another cautionary note saying valuations are the highest since 1900, and that the rally can’t last. It will til it won’t. Fed Chair appointee Jerome Powell faced testimony on Capitol Hill but his confirmation isn’t really in question. His comments about regulation and monetary policy were very consistent with Janet Yellen’s, which the Market really likes. Financial Stocks led the rally with a seemingly much more supportive environment ahead. Speaking of Yellen, she will be on Capitol Hill today for what is likely to be the last time as the head of the Fed. The US economy grew even faster than initially thought. Q3 GDP was revised upward to 3.3% growth, the fastest pace in 3 years. The Senate Budget Committee approved the Senate tax bill by a 12-11 vote. This sets up the full vote in the Senate which is far less certain. Keep in mind, the Senate bill is very different from the bill the House passed last week. There will be plenty more politicking on taxes and nothing else is certain.
Have a great morning,
Mike Frazier
