As tensions between Iran and the US eased stocks responded by hitting all-time highs. The Dow zoomed on heavy trading volume to a closing gain of 212 at 28,957. Leading the way were the FANG stocks which include Faceplant and Amazon. Micropoopie also moved higher while shares of Tesla switched from ludicrous mode to reverse for the first time in a while. The good folks at BTS have gotten over their beloved Patriots losing to the Titans last week and continue to be positive on markets. They have however taken steps to tighten downside protection because with markets at highs it is good to be vigilant.
Yesterday John and I attended a meeting with Fidelity and talked market strategy. The bottom line is that with inflation at 2.1%, the Fed not wanting to raise rates, bullish sentiment near a low of 35% and massive levels of cash on the sidelines they feel 2020 should be ok for investing in stocks. They did caution however that we are in the late stages of a business cycle so don’t get greedy.
US economic data continues to look good. Yesterday’s ADP private sector payroll report came in at 202,000 new jobs which was 42k more than expected plus they revised the November estimate by almost 2X. The official December labor report is due tomorrow and gurus are expecting a decent number. The ISM non-manufacturing survey rose to a reading of 55 which indicates that the service sector in the US continues to grow.