Boosting the stock market today were accommodative comments from international central banks that the printing presses won’t be turned off anytime soon.
Liquidity moves markets!Follow the money. Find the profits!
The Bank of Japan and the European Central Bank both reaffirmed that their easy money policies will remain intact as long as necessary. The news sent European and Asian markets all up more than 1%, with the momentum spilling over to the United States.
“Whenever the Fed starts slowing its stimulus, that will have an impact on markets, but there’s enough strength out of retail and housing that we can sustain our gains, especially with Japan making it very clear what its policy will be,” Tad Hill, chief executive of Freedom Financial Group in Birmingham, AL told Reuters.
Also propelling gains Tuesday was data from S&P/Case-Shiller showing home prices rose 10.9% year-over year in March, the biggest increase in seven years. The increase was better than the expected 10.2% advance, and followed a 9.4% rise in February.
“We have a continued, gradual [home price] recovery,” Brian Jones, a senior U.S. economist for Societe General in New York told Bloomberg. “The data is solid.”
A much improved consumer confidence read further fueled Tuesday’s rally. The index rose to 76.2 in May, a five-year high. The number was better than the predicted rise to 71.2, and up from last month’s upwardly revised 69.0 reading.
Investors Pour Into Stock Market
The biggest fear among market participants right now is the fear of missing rallies. And notably, risk taking is staging a comeback.
As Barron’s noted, high-beta (riskier) stocks have outperformed the overall market this month. The Powershares High Beta Portfolio (NYSE: SPHB) is up 9% in May, while the S&P is up 4.5%.
Moreover, there’s a drift toward what Bespoke Investment Group calls “the dash for trash”…
According to the research firm, the 50 stocks in the S&P 500 Index with the highest short interest have far outperformed the 50 stocks with the lowest short interest in the current quarter. As of early last week, short sellers’ favorites were up 12%, compared to the 5% gain for the lowest short interest stocks.
Biggest Movers in the Stock Market Today
On the shortened week’s economic calendar are: The Bank of Canada’s interest rate decision on Wednesday; a second preliminary Q1 GDP reading and existing home sales report for April on Thursday; and reports on April personal income, April personal consumption and May consumer sentiment on Friday.
Here are stocks making moves in today’s market:
- Valeant Pharmaceuticals (NYSE: VRX), Canada’s largest drug maker, announced a deal to buy eye care specialist Bausch & Lomb from private equity firm Warburg and Pincus in a $8.7 billion deal. The acquisition will complement Valeant’s two other eye-care companies, Eyetech Inc and Visudyne, purchased last year. VRX shares popped nearly 10% on the news and have more than doubled year-to-date.
- Fidelity National Financial Inc. (NYSE: FNF) agreed to acquire Lender Processing Services Inc. (NYSE: LPS), a technology company that services mortgage and real-estate industries, in a $2.9 billion deal. Shares in both companies rose 3%.
- Club Mediterranee SA (EPA: CU) soared 22% in Paris after its two biggest shareholders, investment company Fosun International of China and AXA Private Equity offered to lead a buyout of other owners. The offer reflects a 28% premium over Club Med’s average one-month price.
- Tiffany & Co. (NYSE: TIF) sparked after posting Q1 net income of $83.58 million, or $0.65 per share, up from $81.53 million, or $0.64 cents in the same quarter a year ago. Analysts were looking for EPS of $0.52. Sales rose 9.3%, despite higher precious metal and diamond costs. The company designed the jewelry for the newly released film “The Great Gatsby” and just celebrated its 175th anniversary.
- Business Insider:
Consumer Confidence Blows Past Expectations To Five Year High In May
- Bloomberg News:
Home Prices in U.S. Rise by Most Since 2006 in March
Stock futures gain after central bank comments
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