It’s looking more and more likely that, in the days to come, the Nasdaq Composite will push above its dot-com bubble high set in 2000.
On Thursday, it set a new closing high and is in hot pursuit of its all-time intraday high. Already, the NYSE Composite, a broader measure of the stock market, has pushed above the sideways channel it was mired in since last summer to push to new all-time record highs.
On Thursday, the Dow Jones Industrial Average gained 0.1%, the S&P 500 gained 0.2%, the Nasdaq Composite gained 0.4%, and the Russell 2000 gained 0.5%.
The long funk that stocks were stuck in — as investors weighed concerns such as uneven global economic growth, the specter of rate hikes from the Federal Reserve, the risk of a Greek debt default, and the drag on corporate earnings from the dollar’s strength and the weakness in energy prices — finally seems to be ending.
The catalyst for the rejuvenation is a nascent pullback in the U.S. dollar driven by a growing realization the Fed will need to push back its rate hike timing until the end of the year or possibly into 2016. A June rate liftoff is pretty much of the table now.
Over the past few weeks, Fed officials have been talking up their concerns about the consequences of the dollar’s impressive rise over the past year — including the drag on the foreign earnings of U.S. businesses and the dampening effect on inflation (which is below target) via the dollar’s role in lower energy prices. Also contributing to the dollar’s newfound weakness have been some positive headlines out of Europe that a new bailout deal with Greece is coming together, which is lifting the euro.
That’s boosting a broad swath of assets including crude oil, copper, precious metals and the stocks connected to these goods. Energy, materials, steelmakers and mining names were all on the move.
Consider that the Market Vectors Steel (ETF) (NYSEARCA:SLX) put in its best performance since early February rising 4.6% as Edge subscribers enjoyed a 6.5% rise in their AK Steel Holding Corporation (NYSE:AKS) holding while Edge Pro subscribers watched their May $27 calls in United States Steel Corporation (NYSE:X) rise to a gain of more than 64%.
Energy stocks, as represented by the Energy SPDR (NYSEARCA:XLE), is pushing into territory not seen since November. That helped the Market Vectors Oil Services (NYSEARCA:OIH) recommended to Edge subscribers on April 6 rise to a total gain of nearly 6%.
Crude oil rose 2.5% to close at $57.58 a barrel. Gasoline futures pushed above the $2-a-gallon level for the first time since November, up nearly 63% from the low set in January at $1.23 a gallon. According to reports, Genscape said there was a decline in inventories in the Cushing hub, which if true would be a great sign that supply and demand is coming into balance.
The Q1 reporting season is at full intensity now as results pour out. General Motors Company (NYSE:GM) and 3M Co (NYSE:MMM) dropped 3% and 2.6%, respectively, on earnings misses. Telecoms were strong, with AT&T (NYSE:T) up 4.2% on earnings.
After the close, a wave of tech-sector results washed in:
- Microsoft Corporation (NASDAQ:MSFT) reported top- and bottom-line beats, pushing shares up 3.6% in after-hours trading. That’s great news for Edge Pro subscribers that are looking at an 80%-plus gain in their May $43 call options as shares of the tech giant emerge from a multimonth base.
- Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) reported a 12% jump in revenue — but a slight earnings miss — as shares jumped 3% after hours.
- Amazon.com, Inc. (NASDAQ:AMZN) reported a smaller-than-expected loss of 12 cents per share and strong revenue as operating income grew to $255 million from $146 million last year. Shares are up 4.9% in after-hours trading.