As for the stock market specifically:
The April showers so far rained higher prices on investors. All the major market averages had a strong week. The Nasdaq Composite, which took a bit of a beating in March, had the strongest week.
Growth stocks also turned in a good week.
The stock market so far this year is doing very well – despite what seems to be much holding-on with white knuckles.
It was a good week for the risk assessment tools. The short-term indicators, the intermediate-term indicators, and the long-term bullish percent indicators all returned to offense. The NYSE Bullish Percent crossed the 70% line going north. So it not time to be speculative, but OK to add to stock market holdings where we have cash. The nature of the evidence is that we are in WEALTH ACCUMULATION mode.
Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.
Below is where our indicators stand as of April 9, 2021 (Courtesy Dorsey, Wright, and Associates).
On a general note:
The Department of Commerce gave us the first of its inflation data for March with the release of the Producer Price Index. The one that came to me was not very detailed, so I cannot be as thorough as I would like to be. Overall, wholesale prices rose 1.0% in March, which was double the consensus estimate of economists. There was some difficulty in determining what is “real” vs. what is due to the impact of rapidly declining prices last March, as the economy shut down.
Federal Reserve Chairman Jerome Powell gave an interview that drew some attention. He said the economy continues to get stronger, and he expects very strong economic growth and job growth. He does not see prolonged high inflation. And, he then showed himself well-versed in public health by giving instructions to the world’s population about how they should act in terms of vaccinations and socializing.
I do long for the days of Alan Greenspan (even the cameras watching to determine if his briefcase was empty or overstuffed) who famously remarked “If you understood what I said, I obviously misstated what I was trying to say.”
As always, if you need more information, email me at philip.rongo@ibexwealth.com.