TGIF! March 4, 2016

The month of March has brought much to like for investors.  After a battering in January and February, stocks were up all 4 of the days in March.  This is the best start to a month in over 3 years.  The DOW now has a 3-week win streak going, the best run on the year.  Importantly, the DOW closed back above 17K.  That’s just the 3rd time it’s happened in 2016. The other 2 times were the first 2 trading days of the year when the selloff began.  This was an important week.  We’ve reached higher ground.

Despite the numerous global issues that have weighed on the Market, the US economy’s resiliency continues to impress.  Friday’s job report showed 242K jobs were created in February and the unemployment rate held firm at 4.9%.  The US economy is not growing fast, but it is growing at a sustainable rate, which is something you can’t say about most other nations around the world.  This strong data shouldn’t put pressure on the Fed to raise rates later this month since they are still mindful of the international issues and the negative impact the strong Dollar has had on the US economy.  The Market likes it.

This rally has been broad based.  Looking under the hood, the Market engine is much healthier now than it was most of last year.  Interest rates are now moving higher for the right reasons.  Money flowed out of bonds and into stocks for the first time this year.  That’s a key indicator. The economy is growing. The price of oil is climbing.  The Presidential election has officially reached ludicrous speed.  The correction has been a cleansing mechanism, and in our view, the Bull Market uptrend is resuming.

Both the DOW and S&P are still down roughly 2% on the year, but it’s a far cry from down 10%, and 15% from the highs last Spring.  We took off hedges and put quite a bit of money back to work in recent weeks.  Weakness is buyable.  We don’t think the choppy price action is over by any stretch.  But there’s a lot to like about this Market again.

Have a nice weekend.  We’ll be back, dark and early on Monday.


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