The stock market had it all going on yesterday in a bit of a surprise rally that was slow to develop at first but which gained momentum as the session progressed. Stocks of all sizes participated in the advance; value and growth stocks were on the same winning page; and there was a pro-cyclical orientation that generated some good vibes for market participants.<\/p>\n\n\n\n
The basis for the rally, which saw the Russell 2000 gain 2.2% and the S&P 500 advance 1.2%, was attributed largely to a belief that a debt ceiling deal will get reached before any default, the robust rebound action in the regional bank stocks, and a soft landing\/no landing outlook that was driven by the market’s attention to the Atlanta Fed’s GDPNow model estimate for Q2 real GDP growth being revised to 2.9% from 2.6%.<\/p>\n\n\n\n
This move followed on the heels of large declines registered in Tuesday’s trade, which also came as a bit of a surprise to market participants who have been accustomed to seeing the market adhere to some tight trading ranges.<\/p>\n\n\n\n
Alas, the rebound seen yesterday was larger than the sell-off seen Tuesday, so the major indices enter today notably higher from where they started the week. However, knowing how wishy-washy the trading action has been for many weeks now, we’ll refrain from saying they are sitting comfortably<\/em> higher.<\/p>\n\n\n\n That’s owed in part to the realization that market participants continue to contend with a lot of mixed signals that make it difficult to have a lot of conviction on both the buy side and the sell side. Some of today’s news illustrates this point.<\/p>\n\n\n\n\n