 |
The market had its first back-to-back rally in March with all three major indices gaining more than 1.5% following last Thursday’s 2% gain. We have to go back to early February to see a rally of this scale. As most European markets are closed today for the Easter holiday, today’s rally in the US will likely have some positive impact on the overseas trading tomorrow.
Finally we received some positive news on the housing front. The February existing home sales rose 2.9% to 5.03 million. Economists expected a drop of 1%. Although one month number doesn’t constitute a trend, it nonetheless marks the first monthly gain in a year. In addition, inventories also fell to 9.6 months’ supply, the lowest level in six months. Separately, the Federal Housing Finance Board authorized Federal Home Loan Banks to increase their purchases of agency mortgage backed securities. The latest help from the government means additional $100 billion liquidity will be on its way to the mortgage securities market following last week’s relaxing surplus capital requirement on Fannie Mae and Freddie Mac. The joint efforts by the US government and the Fed so far will result in more than half trillion liquidity in the mortgage securities market and that is not small change.
Both Nasdaq and S&P500 closed above their 50-day moving average so all three major indices are above a key resistance level now. It is worth noting that the Dow Transportation closed at its best level year to day, which is certainly good news for those Dow Theory followers. As we are approaching the end of the quarter, some window dressing activity may occur in the next few sessions.
|
|
|
