This Bull Market Still Has Time | LPL Daily Market Update

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Wednesday, April 14, 2021

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Some bullish stats

Even though the bull market is up more than 80% from the 2020 lows, there are multiple reasons to think this bull market has time left.

  • A strong start to the year in Q1 tends to suggest continued strength.
  • The December lows for the S&P 500 Index weren’t violated in Q1, another bullish signal.
  • Big 12 month gains for stocks tend to resolve higher longer-term.
  • Market breadth is showing historic levels of participation, which could open the door to some near-term weakness or consolidation, but historically, higher prices over the intermediate to long-term are the play book.
  • We will discuss these concepts in more detail later today on the LPL Research Blog, available after 12p.m. ET.

Daily Insights

U.S. stocks little changed while the major banks are having mixed fortunes following earnings releases

  • The S&P 500 Index posted its 21st  all-time high of 2021 on Tuesday.
  • West Texas Intermediate (WTI) crude oil jumps back over $60/barrel as the International Energy Agency lifted its forecasts for demand.
  • European stocks are modestly higher in midday trading with Germany underperforming.
  • Asian markets finished mixed on Wednesday with internet and technology stocks driving gains in most indices, while Japan’s Nikkei 225

Now that’s boring

If things have seemed boring lately, then you are right. The past two weeks have seen extremely low volume and little volatility.

  • In fact, only once over the past 11 trading days has the S&P 500 even moved in a greater than 1% intra-day range.
  • Over the same 11 days last year, it averaged a daily intra-day range of 3.5%.
  • Things won’t stay this tranquil forever, so be open to an increase in volatility at anytime

21 for 2021

Tuesday marked the 21st all-time high for the S&P 500 Index in 2021—the most new highs this early in a year since 1998. Additionally, the S&P 500 is officially up 10% for the year in April, another rare feat, seen most recently in 2013 and 2019. It is important to remember that new highs happen in clusters that can last more than a decade, suggesting this bull market indeed could have plenty of time left.

View enlarged chart.

Technical update

The S&P 500 Index rose 0.3% Tuesday to close at another record high. However, things were less rosy under the surface with utilities the best performing sector and less than half the index actually positive for the day. The Nasdaq Composite was stronger, gaining more than 1% on Tuesday, and needs to climb just 1.4% from Tuesday’s close to set a new intraday high.

COVID-19 news

The United States reported 77,000 new COVID-19 cases on Tuesday, above the 7-day average of 71,000 (source: New York Times).   https://www.nytimes.com/interactive/2020/us/coronavirus-us-cases.html

  • While the pause in administration of the Johnson & Johnson vaccine has drawn attention, President Biden’s staff reports that Pfizer/BioNTech and Moderna should be able to meet U.S. vaccine demand by May.
  • As of Tuesday, nearly 37% of the U.S. population has received at least one dose of the vaccine, while just shy of 80% of the population aged 65 or older has received at least one shot.

LPL Research in the Media

LPL Financial Chief Market Strategist Ryan Detrick joined Yahoo! Finance recently to discuss the upcoming earnings season and more. You can watch the full interview here.

The Earnings Boom Is Here

The outstanding fourth-quarter earnings season we had in 2020 is a tough act to follow, but 2021’s first quarter has the makings of another potentially great earnings season. Learn more in this week’s Weekly Market Commentary.

Earnings Season Is Here

On the LPL Market Signals podcast, Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discuss why they think another very solid earnings season is on the horizon.

 

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