The S&P performed very well yesterday despite last Friday’s bombing in Syria targeting Assad’s chemical weapons. Normally that would be viewed as a negative for stocks but clearly the market saw the attack in Syria as a one-time event and not an ongoing bombing campaign. As we look at the market this morning, stellar earnings from Goldman Sacks has propelled the S&P up to 2700 on the opening bell. I am not entirely sure that the market is all clear from the recent volatility we have seen this year. An important item that investors should remember is that this market runs on earnings and so far they have come in spectacular, so it would not surprise me to see the market continue to grind harder. The main obstacle that could derail stocks is higher rates. The 10-year yield seems to be stuck in a range from 2.70 on the downside to 2.95 on the upside. My feeling is that if we can break the upper end of the range, we should see 3% rather quickly and that could start a bit of a panic for stocks.
Additionally, for bulls in the stock market, the IMF just raised global growth and that has also supported the market this morning. In terms of economic numbers today, the calendar is quiet, but investors should watch closely as there are Fed speakers throughout the day and the markets has both ears open to any comments about rates. Technically, the S&P looks very positive with breaching the 50-day moving average at 2689 and the next major hurdle for the market to take is the 100-day which currently lies at 2703. A breach of that level, which is close presently, is a move to the on March 18 high of 2726.25. I would recommend a buy the dip mentality.
E-mini S&P 500 Jun ’18 Daily Chart