Charts: The S&P 500 closed at 1044, up 1%. It blew up out of the trading channel and is signaling the third rally leg of the bull market. Leadership is good, so far.
Fundamentals: Weekly jobless claims came in better than expected. Continuing claims were better than forecast by a whopping 112,000. The Department of Labor jobs report last week was mixed. The weekly claims info is more forward looking and therefore better, so good news. Also, President Obama’s big speech on healthcare wasn’t as scary as expected. He even talked about modifying malpractice laws, which the market likes.
Geopolitics: Israel says it is building again on the West Bank and East Jerusalem. But it hasn’t started any new projects. Team Obama’s response to Israel’s threat (translated from diplomatic language) was: “No you aren’t building anything, Israel. Don’t screw with me or you will be sorry.” Israel came back with a counter-response that can be translated, “I am too building new settlements, any day now. Just wait and see. You’re not the boss of me, Mr. Superpower.” Weak response Israel. Good job Team Obama.
Specific Stocks: Still on the theme of best in breed. Schweitzer-Maudit International (SWM) is the best maker of cigarette rolling papers, which have exploded in popularity during the recession and weak recovery because people roll their own cigarettes rather than buy pre-made smokes. Cisco (CSCO) sleepy as it is, the networking gear giant is still best in breed.
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