As reported by the Wall Street Journal, trade data indicates that the economy contracted in the First quarter of this year. JP Morgan Chase economists estimated that the economy contracted at an 0.8% pace. Macroeconomic Advisors estimated the decline at 0.6%. Not to worry; everyone seems to think the economy is rebounding in the 2nd Quarter.
Wednesday, the S&P 500 was UP about 0.6% to 1878 (rounded).
VIX Fell about 3% to 13.40.
The yield on the 10-year Treasury Note held steady at 2.59% at the close.
The Bond Ghouls remain worried about the stock market. If the smart money is selling stocks, some are buying bonds.
The S&P 50 bounced up from the 50-dMA today. Tomorrow will give us a clue whether the bounce will continue. Last hour trading was up strongly today and that is a clue the bounce will continue. The chart is no help concerning a possible bounce since the current value of the Index is squarely in the middle of the channel marked by high and low values of the S&P 500.
I’m going to repeat this point until the S&P 500 breaks thru the old highs: The S&P 500 has closed within about 1% of the all-time high of 1891 21-times since 1 Jan 2014. It needs to punch higher or the correction will be back.
Research has shown that to have a diversified portfolio no one stock should be more than 4% of the portfolio total, or stated another way, if your total portfolio consisted of individual stocks, you would need 25-stocks to be “diversified.”