To The Moon

Stocks Extend Rally as Confidence Builds

Optimism

U.S. markets continued their upward momentum, with investors gradually shifting back into a risk-on mindset, though not without hesitation.

The $NASDAQ(.IXIC)$ rose 0.4% on Thursday, marking its 12th consecutive gain, the longest winning streak since 2009. The $S&P 500(.SPX)$ added 0.3% to reach new highs, while the Dow Jones Industrial Average climbed 114 points, or 0.2%.

• Top Gainer: $Albemarle(ALB)$ +16.3%

• Biggest Loser: Charles Schwab -7.6%

• Best Sector: Energy +1.6%

• Worst Sector: Healthcare -0.8%

A Rally Fueled by Relief and Earnings

Several factors are supporting the current market strength:

• A temporary cease-fire in the Middle East

• Strong first-quarter earnings expectations

• Continued resilience in economic data

Analysts expect S&P 500 earnings to grow around 13% year over year, and early reports suggest companies are meeting or exceeding forecasts.

Institutional Buying Signals Strength

One notable trend: recent market gains have increasingly occurred during trading hours, rather than overnight.

Historically, most long-term gains in the S&P 500 happen when markets are closed, as prices adjust to new information. The recent shift, where a large portion of gains is happening intraday, suggests strong institutional buying activity.

Economy Remains Resilient

Recent labor market data continues to show strength. Weekly jobless claims remain low, indicating that even geopolitical tensions and energy shocks are not triggering widespread layoffs.

This supports the growing narrative that the U.S. economy may be more resilient than previously expected.

Another key indicator: the gap between unemployment in California and the national average. Historically, when that gap narrows, a recession tends to follow. For now, that signal suggests continued economic expansion.

Inflation and Oil Still in Focus

Energy prices remain a key variable. Previous spikes tied to disruptions in the Strait of Hormuz have contributed to inflation pressures, though recent easing has helped stabilize expectations.

Markets are closely watching whether these pressures spread into broader inflation, or begin to fade.

Risks Beneath the Surface

Despite the rally, several risks remain:

• Fragile geopolitical cease-fire

• Ongoing supply chain disruptions

• Rising private credit stress

• Potential volatility in oil and commodity markets

Some analysts warn that markets may be underestimating how long it will take to fully repair global supply chains.

Bottom Line

Markets are showing signs of cautious optimism, supported by strong earnings and easing geopolitical fears.

However, this is not a risk-free environment. The rally may continue, but volatility is never far away…

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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