This week’s U.S. news was remarkably bullish. The service sector’s PMI reading was very strong and the surprisingly solid employment report may have put an end-of-the-year rate hike back on the table. As a result, the SPYs finally broke through key resistance to make a new high. But stocks are still expensive. And with another weak earnings quarter fast approaching, it remains doubtful equities will be able to make and hold meaningful gains.
The ISM service’s report was very strong: the index increased 3.6 points to 56.5; activity rose 4.4 points to 59.5 and new orders gained 5.7 points to 59.9. 15 of 18 industries reported positive activity. Most importantly, the anecdotal comments were very encouraging:
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