As the stock and bond markets are closed for Good Friday, let’s take a look at the best week in gains since 1974.
The Dow Jones index rose 13% in the previous four trading days followed by the S&P 500 with 12% gains and the Nasdaq’s 11% gains. These gains came despite Thursday’s news that an additional 6.6 million US workers were laid off.
As I stated many times stocks generally look out six months in the future in determining pricing. Well it’s not too difficult to figure the US economy will be doing better in September. Wall Street economists are seeing annualized growth rates of 6.2% in the third quarter, followed by 6.6% in the fourth quarter.
However, is a brighter future driving the markets higher or is it all the Federal Reserve interventions?
I have to side with Fed chief Jerome Powell for his trillions of dollars muscle flexing.
On Thursday Powell once again super charged his liquidity engine by offering another $2.3 trillion in loans to troubled businesses by going a little further out on the risk curve in its corporate lending programs.
As stocks have rallied nearly 22% since the March 23rd lows it will be interesting to see how long the market will need Powell’s training wheels before riding on its own.
Happy Easter to all my readers.