This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bernanke Pushes Stocks to New Highs

NEW YORK TheStreet -- The recent pullback in global risk assets affected commodities, currency and even some Treasury markets, but has been mostly absent from equities. Poor economic data out of the U.S., Europe, and China gave justification for a broad sell-off, and market analysts, including myself, were defensively preparing for equity weakness.

The pullback never reached the levels that were expected, but inter-market consolidation took place. The existence of the Bernanke Put, an imaginary price floor that keeps equity markets rising, has proven to be real. The Fed's stimulus efforts may not be showing up in the economic data to the degree that many would like, but it has kept investor sentiment elevated.

The nonfarm employment data from Friday outpaced expectations, but remained below where they need to be for real labor market growth. Economic data have proven volatile, which has kept the Federal Reserve active in monitoring the data. The data have improved domestically, but remained weak in Europe and China.

Until growth returns to higher monthly levels and is more stable, stimulus will probably stay. For that reason, U.S. equity markets look to be the best asset class on the table, and will continue to attract money flowing in off the sidelines. The flow of money into the market, along with gradual inclines in economic data and a strong earnings season, should allow for further gains, with little resistance near term.

The ratio above compares S&P Equal Weight ETF (RSP) over SPDR S&P 500 (SPY). This pair gives a deeper look into the participation or breadth of market moves, both up and down. The pair had been flirting with a downward breakout during the past few weeks, as negative news continued to pour on, but support held steady. Corporate earnings, although containing a few prominent misses and unimpressive revenue, have held up rather well. Many believed earnings would grow by a meager 1.2%, but that drastically underestimated the current growth of around 5.2%. The pair has yet to break out of its range, either higher or lower, but with equity markets hitting new highs, it shows a chance of breaking higher.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RSP $79.47 -0.66%
SPY $206.33 -0.54%
TIP $114.90 -0.03%
AAPL $93.75 -1.10%
FB $117.53 0.69%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs