Today cautious investors who’ve been holding the market down since the debt ceiling resolve were finally beat out by the bulls. Investors who got in late in this market are still hesitant to sell, waiting for more gains which is another attribute adding to the bull market.
Earnings Season kicked off with Google exploding past $1,000 per share… a rare club to be in. When industry leaders have stellar earnings, generally the entire sector will trade up with it. An example is the strength that Facebook $FB, chip companies like Invensense $INVN and Radio Frequency Micro Devices $RFMD showed today – it’s not a coincidence. The explosion of handsets in electronic devices and all the chip manufactures that profit along with it is likely to be a trend in this earnings season.
Morgan Stanley also reported another excellent quarter, a direct result of growth in their business, lowering expenses, managing risk and the increased support of asset purchases by the Federal Reserve. This will likely continue for the two or three quarters until their is a significant turnaround in the financial sector. Note: Goldman Sachs $GS had a tough quarter based on speculation of rigging commodities markets a few months back.
Nothing has changed, finally the caution in the market was broken by investors who see much more upside. Talk of Federal Reserve taper may rattle markets temporarily, but there is a very, very slim chance that the asset purchases will slow down next month. In the last 9 months, only 1 of the 12 Federal Reserve members(Esther George) has voted to slow down Dove-ish policy, that number does not turn around in one month.