The S&P 500 tested new all-time highs today as various macro factors and headline news rekindled the bullish momentum for the last 3 trading days of the week. The release of the FOMC minutes on Wednesday afternoon helped refuel risk-on appetite.

Other positive news from employment figures and manufacturing PMI also gave a boost. The bullish sentiment was helped by lower-than-expected jobless claims at 201k, down from last week’s 213k.

While Manufacturing Services PMI came in higher than expected, boding for an expanding economy in the months ahead. Manufacturing PMI printed at 51.5 up from last month’s number at 50.7.

However, the Services PMI number was lower than expected at 51.3, down from last month’s figure of 52.5. But it wasn’t enough to detract from positive outlooks for interest rates from the FOMC minutes.

T-bill yields for 6-month and 12-month notes were higher on Tuesday than the previous week’s auction. So, we saw a small selloff on Tuesday, but the market didn’t let higher short-term rates worry for long.

Today the SPX touched an all-time high of 5111, before trading sideways on a typically low Friday afternoon volume. After the first two days of bearish sentiment, stock investors saw enough reason to continue taking a bullish view of the market.

In particular, Wednesday’s price action shows that the stock market is happy to know further hikes are unlikely to happen. Also, rates are likely coming down, even if it may be at a slower rather than quicker pace.

And the stock market especially likes as low an interest rate environment as possible. Always when GDP still continues to expand as it has been doing. Even if the last number for GDP growth was lower than the previous, an expanding economy is still in place. Which is also seen by low unemployment figures.

The fear of higher interest rates seems to be fading, and the Fed’s pivot point for interest rates seems to be getting closer. This factor is a big stimulus for the stock market. That in itself is an anomaly.

I say that because the Fed Funds market a month ago was pricing in a 46% probability of a cut in March 2024. While today’s Fed Funds pricing gives a probability of 2.5% for an interest rate cut in the March FOMC.