Stocks Charge All Day Long
By Laif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH)
Stocks charged higher at the opening bell on Thursday and continued to rally throughout the day and into the close. Even the weaker-than-expected retail sales report for February couldn’t cast a shadow on the day, as retail sales declined 0.6 percent after falling 0.8 percent in January. This time, it wasn’t falling gasoline sales that was to blame; instead, it was declining auto sales as sales dropped 2.5 percent, after a 0.5 percent gain in January. Excluding autos, retail sales decreased 0.1 percent. Cold winter weather and shoppers’ decision to stay inside may have affected some components of the report such as furniture and home furnishings, electronics and building materials, to name a few. Gains were seen in food and beverage, sporting goods and nonstore retailers (Internet sales).
The stock market enjoyed a broad-based rally on Thursday, with the Standard & Poor’s 500 (large-cap) index rising 1.26 percent and the Russell 2000 (small-cap) index gained 1.66 percent on the day. Some gave credit for the stock market’s rally to the weaker U.S. dollar, as it closed down on the day by 0.53 percent, the first negative close for the dollar in 10 days.
Broadly speaking, U.S. bonds have been less volatile the past week. However, investors have held on to higher-quality bonds over lower-quality due to the stock market’s recent weakness. The top-performing bond index this week is the Barclays U.S. 20+ Year Treasury index, gaining 0.64 percent over the past five trading days, followed by the BofA Merrill Lynch Build America Bond index, higher by 0.36 percent over the same period. This week’s bonds to close in the negative were largely foreign bonds and were likely affected by the recent strength in the U.S. dollar.
This commentary originally published in the Reno Gazette-Journal. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.