US stocks surge, even though the latest readings on GDP and the jobs market show an economy deeply in recession, as the market clearly thinks the worst is over, and is buying just about everything in sight.
DJIA jumps 175 (2.3%) to 7925; index is up 21% from its March 9 low, spurring many to call the bear market over. S&P 500 jumps 19 (2.3%) to 833, Nasdaq Comp gains 58 (3.8%) to 1587.
Every sector rises, with industrials, consumer discretionary, materials leading. On the Dow, Hewlett-Packard, 3M, Caterpillar, United Tech lead gainers. Only Citi, BofA and J&J lose ground.
The stock market’s rise from its March 9 low of 6547 has sparked an avalanche of people declaring the worst is over. But to our thinking, there’s a long way to go before we can say that safely. Off the top of our head: 4Q GDP was terrible, and the 1Q is likely to be in the same dilapidated ballpark. The job market is awful. Not only did IBM announce layoffs this week, so did Google. Google, which practically mints money. And the NY Times is rewarding staffers with two weeks vacation – unpaid.
So are we afraid of missing the boat? No. After everything that’s happened the past year and a half, we’d rather be late on the upside than shirtless on the downside. Call us conservative.