Daily Market Commentary

Stocks Fall After Fed Minutes

Stocks Fall After Fed Minutes

Stocks Fall After Fed Minutes

Tuesday, April 03, 2012
Stock Market Commentary:

Stocks and other risk assets were relatively quiet on Tuesday after factor orders missed estimates and the Fed’s minutes showed central bankers are going to continue to wait for new economic data before taking any further measures. In Q1, the Nasdaq composite surged nearly 19% which was its strongest quarter since 1991! The benchmark S&P 500 jumped nearly 12% or its best quarter sine 1998! Meanwhile, the Dow Jones Industrial Average rose 8%. From our point of view, the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.

Factor Orders Miss Estimates; Fed Stays The Course:

On average, risk assets fell on Tuesday after the latest round of economic data missed estimates and the Fed minutes largely reiterated its recent stance and did not mention Q3. News from the economic front was quiet. Auto sales rose last month which was a net positive, even though gasoline prices are at record highs for this time of year. The Commerce Department said factory orders rose +1.3% in February but missed the +1.5% forecast. At 2 p.m. EST, the Federal Reserve released the minutes of its latest meeting. The minutes largely reiterated Bernanke’s latest cautious, but optimistic, stance regarding the ongoing economic recovery and did not mention QE3.

Market Outlook- Confirmed Rally

Risk assets (mainly stocks and a slew of commodities) jumped after a very shallow pullback, led higher by U.S. equities and agriculture commodities. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if sellers show up and support is breached then the bears will have regained control of this market. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!