This rally just seems to have snuck up out of nowhere. What's fueling it?
We've got a bunch of catalysts.
Let's start with the obvious. The darned thing won't come down. Last week, we had a ton of Fed officials talking about the need to raise rates and the market took it like a champ with the S&P 500 finishing up for the week after four weeks of a selloff.
Then another slew of Fed guns came back this week and spoke insistently about rate hikes and now we are rallying. The refusal to go down on bad news is a sign that something new is afoot, something broader than just the FANG rallies on the mini-bull markets I have talked about nightly.
Second, oil's not done rallying. I can't stress how important this is. Last week, we heard oil was going higher because the Canadian wildfires cut production drastically. Guess what? That oil's back online and it didn't matter. Oil's moving right back up. This market has a hard time going down when oil's up because when oil's soaring the market senses that things are better than one might otherwise believe.
Third, somehow the market's made peace with a stronger dollar. How is that possible? Frankly, I have no answer for this one other than the stocks have already been softened and the higher dollar baked in.
Fourth, giant takeovers are back. Today Monsanto (MON) responded to Bayer, rejecting the German company's bid, but indicating it was open to further negotiations. That's just plain bullish.
Fifth, new-home sales are soaring, hitting the highest level in eight years. You want verification? Go listen to the conference all from Toll Brothers (TOL) - Get Report . The business has gotten very strong, dare I say strong enough to be able to take a rate hike?
Sixth, as Doug Kass points out, the biotechs have gotten red hot. That's fantastic news as this group's been an anchor to leeward for ages.
Finally, we have the magnificent tech rally that I wrote about earlier. It's something to behold, isn't it?
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.