As the first quarter comes to an end, things are looking better with markets having rebounded from February lows. Leadership however has shifted from tech and healthcare to utilities and gold and this makes people nervous since these sectors represent more of a risk averse mindset.
During the 1st quarter the Dow began trading in January at 17,425 then fell to 15,660 before the March recovery kicked it back up to its current close of 17,684 off 31 points on the last day of the quarter. IBD has the market trend listed as “rally” but lately stocks have flattened out as we await the start of Q1 earnings reports next week. One of the biggest buyers of stocks has been corporations using record cash levels to buy back shares off the market however these companies tend to ceace their buying activities in the weeks prior to earnings release and then resume them after the release.
The air is electric as Tesla is introducing its Model 3 later today. Buyers have already been lining up like they would for a Star Wars movie. These folks are standing in line to be able to plunk down $1,000 to get on a list to buy a car that will not be manufactured until late 2017. Does this sound like the Russia of old but with a happy ending instead? The Model 3 is priced at $35,000 and Elon Musk is aiming to sell it to the mass market. The car will be made in Fremont, CA but Tesla is already planning to build and sell the car in China (lord knows they need it) and Europe. This will be an interesting launch.
For Q3, gold posted its biggest quarterly rise in almost 30 years. From Jan one to March thirty one gold is up over 16%. Where it goes from here is anyone’s guess but there are lots of smart people thinking it has more upside thanks to the Federal Reserve becoming squabish, a US dollar that appears to have topped out and turmoil in global markets. There are also those (aka Goldman Sachs) who think gold will fall back to $1,000. Gold closed the day up $4.50 an ounce to $1,233.