Commentary

Equity markets have moved up higher but lower-quality names have been outperforming defensive and high-quality stocks. It is difficult, for data to continue to surprise on the upside,which calls into question the strength of the recent rally. Cost cutting measures cannot continue indefinitely. The government engineered rally, fueled primarily by all of the monetary and fiscal stimulus that has been enacted over the past year, created conditions that also cannot remain permanent. The market has already passed the 1,000 mark, but, we could see some corrective action, which could take the S&P back down to the 850 and 950 levels.