Four Weeks of Bull Market, But Will it Last?

bull market

The stock market has risen for four weeks in a row. The idea of a bull market in 2016 has some investors thrilled, although other investors are still nervous.  geralt / Pixabay

For the past four weeks in a row, the stock market has risen steadily.  The Dow is now back above 17,000 and the S&P 500 is above 2,000.  None of the indices remain in an official correction … where they spent most of January and February.  However, investors are asking themselves … will the bull market last?

Status of the Stock Market as of March 11, 2016

Dow Jones Industrial Averages:

End of 2015:  17,425.03

March 11, 2016: 17,213.31  (-211.72  or -1.2 percent change this year)

52 Week High:  18,351.40  (-1,138.09 which is -6.2 percent below 2015 high)

S & P 500:

End of 2015:   2,043.94

March 11, 2016:  2,022.19  (-21.75 or -1.06 percent change this year)

52 Week High:  2,134.72  (-112.53 which is -5.27 percent below its 2015 high)

NASDAQ:

End of 2015:  5,007.41

March 11:  4,748.47  ( -258.94 or -5.17 percent change this year)

52 Week High:  5,231.94  (-483.47 which is -9.24 percent below its 2015 high)

Which Stocks Have Been Doing The Best?

Below is a list of the stocks that reached new all-time highs this past week:

What Events Have Contributed to the Rising Stock Market?

  • The major indices are now at their highest levels of the year, which is attracting enthusiastic investors.
  • The Eurozone Central Bank released another round of stimulus, including dropping their benchmark interest rate to 0 percent.
  • Oil has risen to a new high for 2016.
  • The Federal Reserve’s policy meeting next week is likely to have a major impact on the equity and currency markets.  It is possible that the Fed may feel more comfortable about making additional interest rate increases later this year, in view of the calmer stock market and positive economic data.
  • Gold futures dropped 0.9 percent this week.  This usually occurs when investors feel comfortable putting their money into equities and other investments, rather than into “safe” havens, such as gold.
  • In addition to improvement in U.S. equities, global stocks have also rallied recently.

This chart may also explain why investors are feeling bullish:

However, despite the other recent good news, the energy sector continues to struggle.  Below is the type of record that worries investors in oil and related industries.  Oil and gas exploration rigs are at the lowest number since record keeping began in 1949.  It is being less economically viable to drill for oil at these prices.

Will Stocks Continue to Rise or is This a Bear Market Rally?

Investor sentiment seems to be improving, an indication that a large number of them believe that the market turn-around could last.

One factor will be what the Eurozone Central Bank does in the future.  Interest rate cuts tend to make investors worry that the world economy is still weak.  Reassurance from chairman Draghi that further rate cuts are unlikely helped bring support to the markets.

In addition, some investors continue to be frustrated by market news, as indicated by this cartoon:

Significant Dates, Events and Economic Reports in March

  • March 15 – Producer Price Index for Feb. 2016
  • March 16 – Consumer Price Index for Feb. 2016
  • March 17 – Job Openings and Labor Turnover for Jan. 2016
  • March 22 – Employment Situation of Veterans Annual Report for 2015

Significant Events and Economic Reports in April

  • April 1 – Employment Situation for March 2016
  • April 5 – Job Openings and Labor Turnover Survey for Feb. 2016
  • April 8 – America’s Young Adults at 29: Labor Market Activity, Education, and Household Composition
  • April 14 – Consumer Price Index for March 2016
  • April 22 – Employment Characteristics of Families Annual 2015 report
  • April 28 – College Enrollment and Work Activity of High School Graduates Annual 2015 report
  • April 29 – Employment Cost Index First Quarter 2016

Sources:

Market prices provided by http://finance.yahoo.com

http://www.bls.gov/schedule/news_release/201512_sched.htm

http://www.breakingnews.com/ (Feb. 2016)

Charts and statistics from: https://twitter.com/StockTwits and CNNMoney


Share with your friends
Facebooktwittergoogle_plusreddit

Follow Us
Facebooktwittergoogle_plusyoutube

Enter your email address to get updated when we have new posts on the site and never miss a thing:

Delivered by FeedBurner





Leave a Reply

Your email address will not be published. Required fields are marked *