The Closing Look

Stocks rallied on Tuesday as the market bounces from deeply oversold levels. Remember stocks have fallen in each of the past 3 weeks and are now bouncing from oversold post brexit levels. Before the open, the government said, the U.S. economy grew at a 1.1% rate in the first quarter of 2016, beating the last estimate of 0.8%. Even though GDP inched higher it was still the third consecutive quarter of slowing output: Q1 2016: +1.1%, Q4 2015: +1.4%, Q3 2015: +2%, Q2 2015: +3.9%. Stocks rallied across the globe as fear eased regarding #Brexit. Just before the close, two suicide bombers blew themselves up at an airport in Turkey.

Gary’s Thoughts: As we stated yesterday, end of quarter, pre-holiday, massively stretched and oversold with a big dose of bearishness insures a rally. As usual, rally is stronger than one would expect.