If the often predicted correction in stocks is finally upon us, no one told traders today. Stocks had an upward bias from the start despite the fact that President Obama had announced last evening that there would be military air strikes in Iraq. As the session hit midday, word that the Russians were backing off their military exercises near the border of Ukraine emboldened the bulls even more and share prices moved higher.
By the close, the Dow Jones Industrial Average was up 185 points to finish the day at 16,553. The S&P 500 was up 22 points to close at 1931. Gold was up a fraction to trade at $1312 per ounce, while oil was up $.26 to trade at $97.60 per barrel WTI.
This is definitely a headline driven market at the moment and those are very difficult to predict. At any moment stock prices can change on a dime, so we’ll just monitor the situations abroad, and not get too caught up in the headline volatility. As earnings season winds down, corporate profits are growing at almost 10% this year while revenues are growing at about 5%. If the economy can continue to improve, and that improvement causes corporate earnings and revenues to increase, then despite the disruption that will be caused by the Fed extricating itself from the proceedings, share prices could work their way higher over time. We’ll keep an eye on those headlines, but also keep our focus on what in the long run moves markets.
Have a great weekend everyone.