Markets are rallying.
The S&P 500 is at 1,998, up 16 points (0.8%).
The Dow is up a whopping 233 points (1.3%). This is largely due to Visa’s 10% surge after reporting strong earnings. Because it’s a price-weighted index, the 21-point rally in the Visa is adding a full 134 points to the Dow. (Currently, a 1-point move in the Dow translates to a 6.42195-point move in the Dow.)
This price action follows the advance Q3 GDP report, which showed that the US economy expanded at a 3.5% rate during the three months ending in September.
European markets had been getting slammed, but they all closed in the green. France’s CAC 40 closed up 0.7%; Spain’s IBEX closed up 0.1%; Italy’s FTSE MIB closed up 0.1%; Britain’s FTSE 100 closed up 0.1%; and Germany’s DAX closed up 0.3%.
In recent weeks, volatility spiked sending the S&P 500 down from 9% from its September 19 all-time high. However, the markets have managed to roar back.
“As I’ve often observed, the current bull market has been a series of panic attacks followed by big relief rallies,” said Ed Yardeni. “Last year and this year, the panic attacks were less severe and shorter than those from 2009-2012. That’s until October’s severe, but short panic attack. Just this year alone, the list of anxiety-provoking events has been a long one: Emerging markets mini crisis (January 23), Crimea invasion (February 28), Yellen rate-hike scare (March 19), momentum stocks meltdown (April 3), ISIS invasion of Iraq (June 10), Portuguese bank panic (July 10), Malaysian jet crisis (July 17), sanctions imposed on Russia (July 29), and the global growth and Ebola scares (September 30). And the year isn’t even over yet.”
Here’s a year-to-date chart of the S&P 500.