“It’s hard to say [Tuesday’s trend] is just a fluke and statistical noise,” says Yahoo! Finance’s Mike Santoli. This bull market has been “incredibly well behaved and methodical.”
The Dow and S&P are both up 17% year-to-date. The constant rotation into U.S. stocks has propelled markets higher but the steady climb in equities has also been unusual, notes Santoli. “It’s almost too calm and unflappable.”
What could cause a selloff in equities this week are comments by Fed Chairman Ben Bernanke, who will be speaking to the Joint Economic Committee of Congress, his first testimony since February, later this morning. Bernanke will give his latest read on the economy but few expect him to reveal the central bank’s timetable for reducing its asset purchases. FOMC members James Bullard and William Dudley said earlier this week that the Fed’s $85 billion bond-buying program would likely continue for the foreseeable future. Chicago Federal Reserve Bank President Charles Evans told CFA Chicago members that the economy "seems to be performing pretty well right now” and the Fed’s monetary accommodation would continue until the economy hits “escape velocity" next year. Market strategists are also anticipating the release of the most recent FOMC minutes this afternoon at 2pm ET.
Investors may have become “overly fixated” on Fed policy, according to Santoli, but comments from Fed officials are not likely to sway investors from buying risky assets.
“The market really needs an excuse to pull back,” he argues.
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