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The hammer was dropped on the head of just about every Republican in the nation today as the Democrats passed their healthcare bill and the stock market actually celebrated the bill’s passage.  The market rallied off of sharp morning losses as investors praised the passage of the healthcare plan.  It was an odd day as morning short covering translated into a full-blown continuation of the recent rally as the S&P approaches a new 52 week high.  Investors are entirely unfazed by the tax now and spend later plan that would appear to be a drag on aggregate demand for several years.    Nonetheless, any and all weakness was bought and the market ultimately finished the day with gains of 0.5%.

Last Friday gave bears brief hope that the rally was weakening, but the remarkable trends remain largely intact.  The SPY has now rallied in 21 of the last 25 sessions and any selling over that period has been met with a rush into risk assets.  The VIX opened 8% higher this morning, but immediately tanked as short covering drove the market back to the break-even level.  High beta names were the biggest movers on the day as the Russell 2,000 and the Nasdaq 100 each rallied over 1%.  Healthcare and insurance names were big movers on the day as investors cheered the government’s move to further subsidize the financial sector.

Many of the standard trends remain in place with today’s gains.  Volume was very low, breadth was moderately positive and Monday’s are always up days (in addition to most other days ending in Y).  It’s difficult to see a catalyst that will disrupt the bull move from here as investor bullishness soars and another positive earnings season is likely right around the corner.  The few fears that have entered the market in recent weeks have done nothing to stop the stampede into risk assets.  The bulls have their eye on 1200 and with the way this market is trading we could get there before month’s end.

From Daily Futures:

U.S. Economy
The Chicago Federal Reserve’s index of national activity fell from -.04 to .-64 in February. The June 2011 eurodollars ended up .04 at 98.425.

Grains and Cotton
The USDA said that last week’s export inspections of:
Corn totaled 41.6 million bushels, up 33% from a year ago.
Soybeans totaled 32.1 million bushels, up 46% from a year ago.
Wheat totaled 18.8 million bushels, down 16% from a year ago.
May soybeans closed up 6.75 cents at $9.685.

May corn fell 3.75 cents to $3.707 with warmer and drier weather in store for most of the central U.S. this week.

After the close, the USDA said that, as of February 28th, there were 516.8 million pounds of frozen pork in storage, down 17% from a year ago and more than expected. Frozen bellies totaled 55.6 million pounds, down 27% from a year ago. June hogs were up .27 at 82.85.

After Friday’s close, the USDA said that, as of March 1st, there were 10.864 million head of cattle on feed, down 3.2% from a year ago, as expected. June cattle closed down 1.05 at 94.07.

It may be getting harder to support lumber prices without some good news from the housing sector. May lumber fell $9.40 to $278.80.

May cocoa closed up $39 at $2,873, helped by bargain-hunting and today’s weaker U.S. dollar.

Sugar prices remain under pressure with anticipation that Brazil’s sugarcane harvest will soon help add to supplies. May sugar closed down .80 at 17.84.

Orange juice
After the close, the USDA said that, as of February 28th, frozen supplies of orange juice concentrate in storage totaled 1.295 billion pounds, up 3% from a year ago. May orange juice was down a penny at $1.4455.

May crude oil started the day lower, blamed on profit-taking, but ended up .63 at 81.60.

Is gold losing its shine? April gold closed down $8.10 at $1,099.5, the lowest close in three weeks.

The June Canadian dollar finished down .40 at 98.04, pressured by today’s early weakness in gold and crude oil prices.

Markets are closed in Japan for Vernal Equinox Day. The June yen closed up .044 at 1.1101.

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