Market Call: Sharp U-Turn

The S&P 500 bottomed most recently on April 19 at 4967.23, rising to 5222.68 on Friday. That's very close to its record high of 5254.35 on March 28. That's a very sharp U-turn! It's getting closer to our 5400 end-of-year target and it is only May. Stock prices rallied as the Q1 earnings reporting season delivered better-than-expected results (chart).

On the other hand, bond prices rallied on the latest batch of economic indicators, which were mostly weaker than expected (chart). Nevertheless, lower bond yields boosted the stock market's valuation multiple. For stocks, both good news and bad news are good news for now.