Records are meant to be broken and last week the Dow Jones matched a record not seen since 1992. Could this positive run spell the end of the current rally?

This was the first time since 1992 that the Dow Jones closed at record highs for 11 straight days. Economic data across the week supported the run on many days and baffled the mind on others.

US Data

Tuesday, Manufacturing and Services PMI data was released. Manufacturing expanded and landed at a rate of 54.3 and services came in at 53.9[1]. While both were reductions from the prior month, they indicate expansion by being above 50. As they both missed expectations, these should have caused losses on the market.

Federal Reserve Board (FRB) minutes point to an increased likelihood of a rate hike in March. Most investors are still targeting June as a base case scenario. The release of these minutes should have caused a down day.

Housing Data

The housing market had a good week for the data reported. Mortgage applications were up, a good indication of future purchases. Existing home sales reached the highest level in almost 10 years. They expanded by 3.3% or 180K units. New home sales increased 3.7% or 20K units. The problem is that they were expected to increase 7%[2]. Even with new home sales missing the mark, an increase in 200K units across these two indicators shows strength coming into the spring.

International Data

Greece agreed to legislative reforms to help contain their debt situation. This should allow them to move forward with their next installment of bailout funds due in the coming months.

The French presidential race is heating up as right wing Populist candidate, Michele Le Pen, continues to close the gap in the polls. Uncertainty around the French Election has dissuaded investment in French equities while interest in European equities in general has been high.

Conclusion

2017 much like 1992, will likely not be remembered for its record setting gains. Just in case you were wondering, the Dow Jones gained 4.17% in 1992. In the spirit of spring training, when a batter comes to the plate who has gone 4 for 4, my initial thought is, ‘He’s due for an out’. With markets matching a feat from 24 years ago, the same thought comes to mind; the markets are due for an out.

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[1] www.investing.com – economic calendar

[2] www.investing.com – economic calendar