Weekly Recap - Week ending 17-May-13
The bulls did their thing again this week, overcoming any concerns about the Fed tapering its asset purchases soon to drive a 2.0% gain in the S&P 500. This week's gain leaves the S&P 500 up 4.3% for the month in what has been a clear decoupling from the "sell in May and go away" couplet.
The week started on a bit of a nervous -- and flat -- note after a weekend article in the Wall Street Journal indicated the Fed has mapped out a strategy for tapering its asset purchases. That view lost its punch, however, with the added indication that the timing of instituting that plan is still uncertain. In brief, the article didn't really tell the market anything it didn't already presume based on prior views communicated in the FOMC Minutes.
Still, the headline itself was enough to cause a pause in the buying action and to overshadow what was a better-than-expected retail sales report for April.
When Tuesday rolled around, buyers were back in action, emboldened by the bullish view of noted hedge fund manager David Tepper of Appaloosa Management. In a CNBC interview before the market opened, Mr. Tepper, who correctly called the market's direction in September 2010, said he is still definitely bullish on the market since all of the evidence in front of him -- an improving economy, attractive valuation, and central bank support -- tells him to be. Mr. Tepper added that the market should not be overly concerned about the Fed tapering and he suggested short sellers will need a shovel to dig out of their graves if the Fed allows the market to party like it's late-1999 again by not tapering its asset purchases.
Market participants took Mr. Tepper's view and