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NYSE MAC DESK MID-DAY MARKET UPDATE:

DOW 16,500 (+42 points), S&P500 1879 (+7 handles), Brent Crude $106.21/barrel (-$1.55), Gold $1,281.00/oz. (-$2.40)

MARKET DRIVERS: (Stocks are looking strong again today, as the S&P 500 touched a new all-time intraday record high. An increase in the ISM manufacturing index has boosted investor-optimism on the state of the U.S. economy.)

• The U.S. Institute for Supply Management’s manufacturing index increased to 53.7 in March from 53.2 in the prior month; falling short of the Street’s projected reading of 54. Readings above 50 indicate growth.
• In addition, construction spending rose 0.1% in February, as expected..
• PMI data from China was “mixed”, with the official gauge, which focuses on larger state-owned enterprises, edging up to 50.3 in March from 50.2 in February. However, the HSBC index, which gives more weight to smaller private companies, slipped to 48 from 48.5. HSBC said that its reading confirms the weakness of domestic demand and that it implies 1Q GDP growth of below the annual goal of 7.5%.
• Euro-zone manufacturing PMI slipped to 53 in March from 53.2 in February. The survey indicated that production rose 1% in Q1 and GDP was +0.5%. Meanwhile, euro-zone unemployment held steady at 11.9% in February, coming in below consensus of 12%.

A lot of market factors in our favor today… First day of a new month and a new quarter has a solid history of an upside bias as we usually see new money being put to work by money managers. In addition, history also dictates that the month of April is the best month of the year for the Bulls… Then, when we got to the floor at the crack of dawn this morning, we saw global markets rallying on hopes that more China economic stimulus is on the way after more disappointing economic data came out of the world’s second-largest economy. China’s official purchasing managing index inched up to 50.3 in March from 50.2 in February, (small expansion); however, some economists argue it still suggest weakness because activity usually picks up more after the Lunar New Year. Meanwhile, the Markit/HSBC Purchasing Managers’ Index, which focuses more on the private sector, slid to an eight-month low of 48.0 last month. Look for the powers-that-be in China to make a ‘stimulative’ move very soon… In following, US ISM hit the tape after the opening bell and was cheered by traders; pushing the major indices to session-highs and, particularly, moving the S&P 500 to a new intraday high… To this point, traders contend that the most important issue going into Q2 is: will the economy pick up? We need GDP to lift from 1.5 to 2% in Q1 to at least 2.5% in Q2 and over 3% in the second half. Hence, the big debate on trading desks for Q2: growth versus value. The popular trade going into Q1 was to be long growth and short non-growth. However, many traders have been hurt badly in the last few weeks on that trade. A lot of the debate is over whether the growth names with big run-ups remain ‘buys’ at the higher prices… Time will tell… Moving on, the Dow has settled into a narrow trading range, and volume is heavier, with ~260M shares on the tape at this time… Internally, breadth is bullish across the board. Advancing Issues: 2631 / Declining Issues: 1603 — for a ratio of 1.6 to 1. New 52-Week Highs: 205/ New 52-Week Lows: 17… Meanwhile, in the trading pits, The yield on the 10-year Treasury note ticked up to 2.752% on a slight sell-off. In addition, gold is furthering losses to a near seven-week low… Still hearing much buzz about Michael Lewis’ book, “Flash Boys”. If you have questions or concerns feel free to shoot me a note. This topic, and the topic of equity market structure in general is right in my wheelhouse. Bottom-line, the current structure of equity markets is waaaay too complex and needs real reform… Would love to discuss over a few cold ones with anyone who is available! -— Good for now… Have a tremendous day!