Despite today's disappointing GDP, the market uptrend remains intact.
The S&P 500 got within one point of its historic closing high (1,593) yesterday. The bottom line is that despite all the worries (Europe recession, China growth slowing, March economic weakness in U.S., etc.), the U.S. stock market has gone almost straight up since the beginning of the year. The two "pullbacks" that occurred at the end of February and the middle of April were shallow, two percent affairs.
One reason the markets have held up so well: healthy rotation. This week, cyclicals (materials, energy, industrials) have outperformed defensive (consumer) names after several weeks of the opposite trend—the Cyclical Index is up 2.9 percent this week, the Consumer Index up 0.1 percent this week.
Strange week for those of us who watch the markets. We have had two separate events that go to the credibility of business news (the hack of AP Twitter's account) and the reliability of the markets (the CBOE software glitch yesterday).