The S&P 500 is gaining nearly 1% as we approach the lunchtime hour on the east coast. The market is being led by the financial stocks as the risk-on trade is back.
Financials Rally
The SPDR Financial ETF ($XLF) is up 1.3% today to the best level since last August and is being led by big gains from Goldman Sachs (NYSE: GS), Morgan Stanley ($MS), and JPMorgan Chase ($JPM). The rally comes ahead of the release of the bank stress tests on Thursday. The speculation is that the results will allow the banks to increase their dividend payouts and buy back shares. Both scenarios will lead to more investors flocking to the sector and is why the buying has begun today.
Retail Sales
US Retail Sales biggest gain in five months with February up 1.1% versus 0.6% in January. Sales ex-autos came in at 0.9% versus expectations of 0.7%. It appears the consumer continues to chug along even as the overall view on the economy remains neutral at best. The SPDR Retail ETF ($XRT) is breaking out to a new all-time high on the news.
Greenback Rallies
The U.S. Dollar Index hit the best level in nearly two months as investors view the currency as the best of the best. The Euro continues to hit headwinds due to the sovereign debt issues, the Yen is falling with the BOJ decision, and the U.S. appears to have the best economy of the developed nations. The PowerShares US Dollar Index Bullish ETF ($UUP) was last up 0.2%.
Market expert and TV personality Matt McCall blogs about what is really moving the markets. He will emphasize Exchange-Traded Funds (ETFs) and individual stocks throughout the trading day.
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