📈Why Did The Stock Market Rally Yesterday?

The stock market defied economic data and rallied yesterday. The SP500 was up 1.5% and the Nasdaq lifted 1.6% The question is why. To start with the data released yesterday was the ISM Non manufacturing PMI. (ISM) Non-Manufacturing Purchasing Managers' Index (PMI), know as ISM Services PMI, report on business conditions for the non-manufacturing sector. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding. The estimate of 54.5 was beaten by the actual release of 55.1. Initially we sold off and then rallied closing at highs on the week.

As we can see in the above graph the SP500 (SPX) high of the year was the previous ISM services PMI monthly release of 55.2 in Early February. While the March number was higher it was still mildly lower then the February actual number. This could be helpful in reducing concerns that inflation was preparing to go back to highs and therefore more rate hikes than anticipated.

As you can see above the 10 year treasury yield (TNX) dropped as bond traders rushed in to buy right at 10 am. The only logical conclusion is that the data release was not as bad as expected.

Fast forward to later in the day to when Bostic spoke at 11:45 am EST. In his previous statement the day before he stated that he was leaning toward 25 basis points in the next Fed meeting. He reiterated that statement and actually expanded adding “slow and steady”

“Bostic told the media he’s in favor of lower — and slower — rate hikes. “Right now I’m still in very firmly in the quarter-point move pacing,” Bostic said, adding that “slow and steady” is his preferred course of action. - per CNBC

The reaction to the comments is unmistakable the SP500 (SPX) rallied over a major resistance level and closed at highs of the week.

For A more In depth view of the Stock Market and what Stocks to watch next week watch the video below. Pay close attention to the comments on NVDA.

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Wishing Everyone Massive Success in 2023 🍾