Daily Insight

U.S. stocks shook off pre-market jitters and an early-session decline to extend the latest winning streak to four days. The latest report on mortgage delinquencies and a better-than-expected CPI reading provided the impetus to push stock prices higher.

The headline delinquency figures for the fourth quarter looked good, in a relative sense. The report showed mortgages that are at least 30 days late improved on a quarter-over-quarter basis, although mortgages that are 90-days late deteriorated, more on that below.

The CPI data helped to ease concerns that the Fed will earnestly begin the Great Unwind sooner than was previously expected. Pre-market trading showed a significant degree of unease following the Fed’s surprise discount rate hike after the bell on Thursday (at least in terms of timing, Bernanke has telegraphed this was coming). The tamer-than-expected CPI print, namely the negative reading on core CPI (a worthless indicator right now in my view but the Fed continues to give core inflation readings -- which exclude food and energy prices -- the most merit), offered support the fed funds rate won’t be hiked anytime too soon.

It was a good week for stocks. The market was open just four days due to Presidents Day and the broad market was up in all four, ending the week higher by 3.13% and erased most of the late-January/early-February losses. As we open this morning, the S&P 500 is just 3.56% below the 15-month high hit on January 19.

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Brent Vondera, Senior Analyst