Weekly Round Up of Markets

But first Friday wrap-up

Amid good news and bad news from the economy Friday, stocks teeter-tottered to end barely changed for the day. But the indexes are still standing at their highest in years. Moreover the S&P 500 closed out its best week in three months with a slim gain on Friday as investors continued to propel equities near four-year highs.

The S&P 500 edged up 0.1%, while the Nasdaq ceded a fraction and the Dow Jones industrial average fell 0.2%. Volume increased on the Nasdaq and the NYSE, according to preliminary data.

Consumer prices — excluding food and energy costs — edged up 0.1% in February, the government reported. That’s not nearly enough to worry about an early start to the Fed’s rate-hiking cycle. But consumer sentiment and industrial production provided the bad news — or maybe good news, if you think it will keep the Fed priming the pump.

Let’s look at some interesting developments.

41 sessions without 1% correction!

On March 6th, all of the key indices were moving lower with the Dow losing 203 points (-1.57%) on that day while the S&P 500 lost -20.97 (-1.54%). This marked the first time the S&P 500 had lost more than 1% in a single session since December 28th.

According to research by Trader Patrick Chu, since 1980 there were 18 occasions when the S&P 500 had gone at least 41 trading sessions without a single 1% decline. He then tracked the market’s performance after the first 1% down day had occurred. The subsequent gain after 20, 60, and 120 trading sessions was 0.8%, 3.7% and 6.7%, respectively.

Another report from Ned Davis Research confirms that this lack of volatility could be healthy for the market. Based on his study, this is only the ninth time since 1928 that the S&P 500 has started the year without a 1% correction during the first 40 days of trading. The average gain for the remainder of the year for these periods was 18.4%. There was only one year that the March to December period suffered a loss which occurred in 1966.

Russel lags the rest!

We all bowed and raised our hats to S&P500 sailing through the gates of 1367 and then 1400 later on but have you guys noticed the bouts going on between Russel 2000 and its prior highs.

If you notice in above charts all the indexes have taken out their prior highs except Russel 2000. Should we be concerned about this at all?

Interesting Reads –

S&P 500 best week (RUE)

Last week’s top 10 (StreetInsider)

In quick summation (Peter Boockvar)

U.S. week ahead (Reuters)

Unemployment Vs Unemployment (Data)

Economic confidence matches best in four years (Gallup)

Earnings forecasts take a bullish turn (FT)

China Sneezes (Data)

China hard landing (Bbg)