US stocks rallied overnight with the financials advancing 2%, a solid performance in our opinion considering bond yields were very quiet. The game remains the same, sector rotation, and if the elastic band keeps stretching towards the financials at the expense of the resources, we will be tempted to tweak slightly in the direction of the later in the weeks ahead, bonds & the $US are likely to remain the key short-term.
The S&P500 finally closed up 1% last night within a few ticks of its all-time high, we might be seeing the occasional wobble, but stocks are still in a very bullish mood.
The real star of the show overnight was the small cap Russell 2000 which actually made fresh all-time highs boding well for the ASX and implying interest rates will indeed stay lower for longer.
