For three weeks in a row, US stock markets have resisted the gravitational pull of the bears and short-sellers with US company reporting, consumer confidence and other economic indicators giving the bulls something to run with. Comments about the banks and the stress tests have not spooked the market, but we get all of the details this week, so this is another important test. The markets have even overcome swine flu!
The S&P 500 rose nearly 5 points to 877 beating the 875-level chartists say is an important resistance point.
So the scene is set for the stress tests to test the rally. It seems logical a pullback will happen, but it looks less likely that we will see the March 6 low of 666 on the S&P 500. It would take a real shock piece of news to do that at this stage with what we know.
China looks to be reacting well to its stimulus and the USA looks set to recover in the second-half of this year, but question marks remain over Europe.
For us here, we get a good snapshot of how we were going in March with building approvals, retail trade and unemployment all coming out. I’m not expecting great news as the bad news came thick and fast in March.
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