S&P 500 Snapshot: A Modest Consolidation
After Yesterday's All-Time High
Today was the second day of little or no economic news following the big flow of data on Friday, most notably the upbeat November Jobs Report. Following the 1.12% Friday gain, it's not surprising that, absent market-moving news, the US indexes would trade in a narrow range with the potential for some consolidation. That's what we saw in yesterday's fractional gain in the second narrowest intraday trading range of 2013 (the average of which is 0.86%). Likewise, today's modest decline of 0.32% within a 0.38% range also warrants the label "narrow" -- the 4th percentile of the 238 market days so far this year.
The popular financial press, always ready to explain the market, points to renewed concerns of near-term tapering on last week's stronger-than-expected economic news (e.g., Bloomberg). Spin such as this is not surprising with the next FOMC meeting only a week away, a meeting that will include a summary of economic projections and a press conference by exiting Chairman Bernanke.
Is it not conceivable that Bernanke might want the initial taper announcement to occur on his watch?
Meanwhile, yield on the 10-year note closed at 2.81%, down five bps from yesterday's close and 17 bps off its 2.98% interim high set in early September.
Here is a 15-minute look at the past three days, which gives us the context of Friday's big move on the November Jobs Report.
Today's modest retreat came on unremarkable volume.
The S&P 500 is now up 26.39% for 2013.
For a better sense of how these declines figure into a larger historical context, here's a long-term view of secular bull and bear markets in the S&P Composite since 1871.