The S&P 500 hit an historic high on a confluence of near-perfect market events.
I've written recently about the near-Goldilocks state of the stock market:
Geopolitics: The French elections on Sunday have led to a relief rally. Germany closed at a historic high again today. France closed at the highest level since 2008. But the most important factor in the rally has been earnings: European markets are higher on a combination of better economic growth and policy support. Emerging markets are also higher, for similar reasons. The percentage of countries that have seen their forward earnings estimates rise over the past three months is at its highest levels since 2009, according to Keith Lerner, Chief Market Strategist at SunTrust Advisory Services.
Earnings: U.S. company guidance for 2017 is holding up well, with the exception of oil stocks, which has been slipping as oil has dropped below $50. Half of the S&P 500 companies have seen their earnings estimates raised by analysts, the highest level since 2015, Lerner said.
U.S. economy: Today's April jobs report was a big relief for the bulls. One risk to stocks was the poor performance of the U.S. economy, which managed to generate a miserly 0.7 percent GDP growth. Traders believed that the numbers would improve in Q2, and today's numbers went a long way toward proving that assumption is correct.
Federal Reserve: Today's employment report supports the Fed's thesis that the soft patch in Q1 was "transitory," in the Fed's words. The data is good, but not too good. The Fed is essentially out of the picture. Traders are expecting two rate hikes, and nothing that has happened recently has changed that view.
Tax cuts: They are now in play.
What's this all mean? We were locked in an absurdly tight trading range for the past two weeks, just below the historic closing high of 2,395 on the S&P 500.
It means, in the words of one witty trader, that flat was the new up.
But not any more.
This was one of those rare weekends when it pays to go long into the close.