A somewhat lethargic market found some late-day energy yesterday that was fueled by the Treasury Department’s lower-than-expected first quarter borrowing estimate. Specifically, it was $55 billion less than previously expected. That appeared to be music to the ears of the Treasury market, which saw yields tumble in the wake of the news and stocks power up as those yields fell.<\/p>\n\n\n\n
The S&P 500 and Dow Jones Industrial Average hit new record highs, with the former topping 4,900 after clearing 4,800 only a few weeks ago.<\/p>\n\n\n\n
The mega-cap stocks powered the move, but small-cap stocks also enjoyed the ride. The Russell 2000 (+1.7%) outperformed the other indices.<\/p>\n\n\n\n
Things are looking more subdued this morning. The S&P 500 futures are down 11 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 43 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 87 points and are trading 0.2% below fair value.<\/p>\n\n\n\n
It’s a bit of a give-and-take trade in that some market participants seem to be using yesterday’s rally to take some money off the table, recognizing that the rally further stretched out valuations and the parabolic returns from the October lows.<\/p>\n\n\n\n
At the same time, there is a knowingness that there are some big trading catalysts straight ahead that could inject some added volatility. Those would be the earnings reports after the close from Microsoft (MSFT), Alphabet (GOOG)<\/strong>, and Adv. Micro Devices (AMD)<\/strong>.<\/p>\n\n\n\n Not to put the cart before the horse, though. There are a bunch of earnings horses running this morning in different directions. That has capped some of the overall buying enthusiasm.<\/p>\n\n\n\n