Via ConvergEx's Nicholas Colas,
With yesterday’s impressive equity rally, every trader is asking the same question: “Can U.S. equities go green on the year?” The S&P 500 is now down “just” 3.2% in 2016 and there’s nothing like a +2% one-day rally to hold out hope of actual gains before March 31.
After the recent sharp spike higher in the S&P which has pushed it 150 points off its lows, the market may be down 3% since the beginning of the year. However, while many have blamed the 2016 selloff and subsequent rebound on central bank policy confusion, what many are forgetting is that a key factor pushing stocks lower are corporate earnings. And, as JPM reminds us, even with stocks 3% lower for the year, the overall market is more expensive now than it was at the start of the year.
Following yesterday's torrid 2.4% March opening rally, which resulted in the biggest S&P gain since January and the best first day of March in history on what was initially seen as very bad news, and then reinterpreted as great news, overnight futures have taken a breather, and erased a modest overnight continuation rally to track the price of oil lower.
it was just last Friday, when roughly at the same time that Dennis Gartman flipflopped to bullish (just as the rally stalled, and just before turning bearish again ahead of today's torrid rally) we reported that in what came as a surprise to us, that just as Jeff Gundlach was warning about the impending failure of central banks, the lack of a "bullish case for oil", about a bear market for stocks, and about an imminent surge in gold in early February, the DoubleLine manager was buying stocks.