As of its April 2023 month-end closing value, NASDAQ had fulfilled the requirement to be designated a ‘bull’ market, since it was +21.2% relative to its 52-week bottom touched on October 13, 2022. Both the DJI and the S&P 500 also had their recent nadirs on October 13 of last year and are now almost in bull territory, at +19.0% and +19.4% respectively.
The best explanation appears to be that, yes, there are some negative things occurring on the business front, but it’s just the right amount of negativity. It’s a degree of ‘bad’ that, as long as it doesn’t extend too long or open a sink hole too deep, will satisfy the Federal Reserve concerning victory in its inflation fight, and implying no need to do much more about raising interest rates. Another 25 basis-point hike may be coming almost immediately, but that should be it.
There’s an interesting regional sidebar to the ‘layoff’ statistics. For all types of work, they’ve increased minimally in the South , while they’re way up in the Northeast , the Midwest , and especially the West . Nationally, they’re +29.3% y/y. Also, there’s an extension of the ‘debt ceiling limit’ that needs to be resolved. Treasury Secretary Janet Yellen has identified June 1 as the date when the federal government may not have enough money in its coffers to pay the bills. But we’ve seen this play before. Brinksmanship over the debt ceiling has become commonplace and it’s always been successfully worked out in the past, although admittedly with a credit rating downgrade as an occasional consequence.