The stock rose to a new cycle high last week, with more than 80% of stocks trading above their 200-day moving average, a technical indicator used to gauge the overall trend and health of the market.
Additionally, the NYSE Advance/Decline Line, which measures the number of rising versus falling stocks, also hit a new all-time high, confirming this strength.
While sectors such as sustainable and transportation showed some weakness, implying that this may not be early in the economic cycle, broad market strength and robust bank performance, together with stable credit conditions in the US and Europe, suggest , note that the economy is not yet late in the cycle. Strategas analysts wrote this in a report on Monday.
Looking ahead, the S&P breakout points to the 5,550-5,600 range as the next target, “supported by seasonal tailwinds through about mid-July (early support is around 5160),” the broker noted.
Meanwhile, (BTC) has reclaimed its 50-day moving average and appears poised to attack previous highs, indicating strong risk appetite as summer approaches.
At the global level, views on China have evolved, analysts said.
At the end of last year, the outlook was pessimistic and then turned to a sense of major capitulation in January. “A good tactical rally” was expected in February and March. Now circumstances increasingly point to ‘a strategic turn’.
“Time will tell, but the strong momentum in China’s indices should not be ignored or overlooked,” analysts wrote.
“The general sequence of events in this sector is 1) price moves, 2) a story develops and 3) flows eventually follow… we suspect we are still in phase 1,” she added.
