June 5th 2014 – Record rise for stocks before employment report

Market View:

Boy oh Boy, the ECB threw a spanner in the works at the top of an already overbought rally.  I was starting to get nervous about the market pulling back swiftly.  It is just so unusual for it to climb so high so fast without a mini dip at least.  However, here we are, that is exactly what it has accomplished.  The only negative was a sideways move for a couple of days before this big spike higher today.

Tomorrow we have the monthly jobs report out at 8:30am.  Normally this moves the market higher should it be a positive report, however, with all the news being good news recently it may take an enormous boost in job creation to take us into higher levels.  I suspect we will see a pause tomorrow as some profit taking comes into the market.

Market News:

U.S. stocks closed at record highs on Thursday, with both the Dow and the S&P 500 advancing further into uncharted territory, after the European Central Bank moved to combat disinflation and investors looked to Friday’s employment report.

“This was a historic move by a major central bank,” Mark Luschini, chief investment strategist at Janney Montgomery Scott, said of the ECB’s decision to cut its key lending rate to 0.15 percent from 0.25 percent and the overnight deposit rate to 0.1 percent from zero, as policy makers attempt to fend off deflation in the region.

The added measures that have the ECB offering banks cheap, long-term funding so long as they use it to hike lending to companies were intended to provide “liquidity into the corporate marketplace, where banks have been reluctant lenders,” said Luschini.

U.S. stocks were also boosted by avid Tepper, the founder of Appaloosa Management.  He said his chief market concerns have “alleviated” in part due to the ECB move.

Tepper spooked many investors last month by saying he’s “nervous” about stock prices and preaching caution given concerns about U.S. and European growth and China’s slowdown.

But Tepper, who hauled in a $3.5 billion in pay last year, now believes all of those fears “one by one” have been eased.

U.S. Securities and Exchange Commission Chair Mary Jo White announced Thursday afternoon for the first time that the organization would establish stricter rules for high-speed trading and dark pools.

Ahead of Thursday’s open, stock futures held gains after the U.S. government reported jobless claims rose by 8,000 to 312,000 last week.

Separate data had Challenger, Gray & Christmas reporting employers announced plans to cut payrolls by 52,961 in May.

European markets shook off an earlier malaise to close sharply higher.

FRIDAY: Nonfarm payrolls, consumer credit, Wal-Mart shareholders mtg

News Sources:  CNBC and CNN Money