U.S. Stock Market - The New Safe Haven For Global Investors?

Traditional safe-haven investments often include gold, silver, platinum, the U.S. Dollar, and U.S. Treasury securities, but few would normally include broad measures of U.S. stocks on this list. However, after seeing “all red” on my screen early this morning for almost every global stock market index, and then watching most major U.S. stock indexes recover from steep losses to end today near unchanged, I honestly came away with the feeling that U.S. stocks may now be considered “safe havens” from a new European contagion that began in Cyprus and is now spreading to Italy, Spain, and throughout Europe.

  

Here are today’s closing marks, with changes from Tuesday’s close:

                                                                                    Wednesday’s Closing Prices              

Dow Jones Industrial Average                        14,526.16        -  33.49            - 0.23%

S&P 500 Index                                                  1,562.85        -    0.92            - 0.06%

NASDAQ Composite Index                               3,256.52        +   4.04            +0.12%

Russell 2000 Index                                               950.24        +   0.42            +0.04%

Bottom Line: With today’s rebound from a gap-down U.S. opening serving as a launching pad, bullish stock market investors will not be denied in seeing a new record high in the S&P 500 Index tomorrow (Thursday). The $64,000 question, of course, is “when the SPX posts a new all time high tomorrow, will a rush of sideline cash extend the current advance to significantly higher levels?” I think the answer is No! I think there is no significant sideline cash ready to buy stocks at these levels, and I also think there will be negligible short-covering because there are very few shorts who could have possibly maintained any meaningful bearish position through this extraordinary advance.