The market may have been disappointed with the Fed's hawkishness on Wednesday but it is celebrating Mario Draghi this morning despite an announcement that quantitative easing is coming to an end in the Eurozone.
Like the Fed news yesterday, there wasn't anything particularly surprising in the ECB announcement but the market was in a buying mood this morning and decided to put a positive spin on the news. Draghi did the usual hedging when talking about winding down the bond buying program and that seems to be enough to satisfy the market.
Breadth is solid at it approaches 2 to 1 positive but what is most impressive about the action is the momentum in some bigger cap, cloud computing and internet names. Names like Twitter (TWTR) , Etsy (ETSY) , GrubHub (GRUB) and Pivotal Software (PVTL) are being chased higher.
A few China names I've mentioned numerous times in recent weeks continue to run higher and are at nose bleed levels now. I am still holding but have reduced exposure to iQIYI (IQ) , Bilibili (BILI) and HUYA (HUYA) .
Typically the 'go to' sector when the central banks are hawkish are banks and financials but that is not working this time because the yield curve continues to move toward flat. Banks can't make money when short term rates are running close to longer term rates.
What is most impressive about this market is that it just doesn't want to sell off. It could find some good reasons to do so if if was so inclined but that just isn't happening. There was a brief bout of volatility on the Fed news yesterday but it seems to have been forgotten already.
If we have another poor close today that will be cause for concern but right now the strong breath and pockets of momentum are keeping sentiment quite positive.