U.S. markets traded higher despite worry over inflation fears and weaker-than-expected economic news to extend its winning streak to 4-straight sessions.

The continued follow through remains a bullish signal as the 50-day moving averages for the major indexes are back in play.

The Nasdaq showed the strongest gains after zooming 1.9% and trading to an intraday high of 7,152 while closing back above its 50-day moving average.

The Russell 2000 rallied 1.8% after making a run to 1,523 to close back above the 1,500 level for the first time in five sessions.

The index is less than 2% away from its 50-day moving average.

The S&P 500 surged 1.3% after trading to a high of 2,702 while closing just below the 2,700 level. The Dow jumped 1% after testing n intraday peak of 24,925.

With today’s gains, both indexes pulled within 1% of their 50-day moving averages.

Financials and Tech were the strongest sectors after rising 2.4% and 1.8%, respectively.

Utilities and Real Estate were sector laggards after sliding 1.1% and 0.6%.

Global Economy – European markets were mostly higher after showing signs of economic strength in the region. Germany’s DAX 30 rose 1.2% while the Stoxx Europe 600 and France’s CAC 40 were higher by 1.1%.

UK’s FTSE 100 advanced 0.6% and the Belgium20 was up 0.2%.

Eurozone December industrial production rose 0.4% month-over-month and 5.2% year-over-year, topping expectations for a gain of 0.1% and 4.2%, respectively.

Eurozone Q4 GDP was left unrevised at 0.6% quarter-over-quarter and 2.7% year-over-year.

Asian markets settled mixed with Hong Kong’s Hang Seng being the standout after surged 2.3%.

South Korea’s Kospi jumped 1.1% and China’s Shanghai was higher by 0.5%. Japan’s Nikkei dropped 0.4% and Australia’s S&P/ASX 200 slipped 0.3%.

Japan Q4 GDP rose 0.5% quarter-over-quarter annualized, weaker than expectations of for a gain of 1% and the slowest pace of growth in 2-years.

The Q4 GDP deflator was unchanged year-over-year, matching expectations. Q4 private consumption rose 0.5% quarter-over-quarter, stronger than expectations for a rise of 0.4%. Q4 business spending rose 0.7%, weaker than expectations for an advance of 1.1%.

U.S. MBA Mortgage Applications Index sank 4% with a 5.9% drop in the purchase index and a 1.9% decline in the refinancing index for the week ending February 9th.

The 30-year fixed rate 7 basis points 4.57% and the highest level since January 2014.

January CPI checked in at 0.5% versus expectations for a rise of 0.3%. January Consumer Price Index was up 2%, matching expectations.

Retail Sales were down 0.3%, and below expectations for a gain of 0.2%.

U.S. Business Inventories increased 0.4% in December, with sales up 0.6%, just shy of expectations. The inventory-sales ratio was steady at 1.33.

Retailer inventories edged up 0.2%, despite a 0.4% sip in autos. Sales were boosted by another strong gain from wholesalers, which were up 1.2%.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory throughout the session after testing an intraday low of $117.47.

Upper support at $117.50-$117 held into the closing bell with risk to $116.50-$116 and fresh 52-week lows on continued weakness. Lowered resistance at $118-$118.50.

Market Analysis – The Spider S&P 500 ETF (SPY) was up for the 4th-straight session after testing an intraday high of $270.

Fresh resistance is at $270.75-$271.50 and the 50-day moving average with continued closes above the latter being a bullish signal.

Rising support is at $267.50-$267 with risk to $265-$262.50 on a move back below the latter.

RSI is back in an uptrend with near-term resistance at 50. Support is at 40.

The Spider Gold Shares (GLD) soared 1.6% after trading to a high of $128.59.

January resistance at $128.50-$129 with a close above the latter being a continued bullish development for a run past $130 and fresh 52-week peaks.

Rising support is at $127-$126.50.

RSI is in a slight uptrend and appears on track to test January and early September resistance at 70-75. Support is at 60.

All the best,
Roger Scott