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The Market Sum | Insight after the bell

By Caleb Silver, Editor in Chief

Wednesday's Headlines

1. U.S. Markets Rally for Third Day in a Row. Hard Brexit Rejected.

Markets Close

Dow
25,702.89 +0.58%

S&P
2,810.92 +0.69%

Nasdaq
7,643.41 +0.69%

VIX
13.41 -2.61%

INV Anxiety Index
98.17 Low

US 10-Yr Yield
2.611 +0.23%

Credits: TF-Images/ Getty Images

Markets Rally Again

U.S. markets rallied for the third straight day, recouping last week's losses. Tech stocks led the way. The S&P 500 hit a new high for 2019 and is hovering around that key 2816 support level again, which has proven to be a tough barrier to break. James has more on that in our daily chart, below.

'Hard Brexit' Denied

British Parliament have backed themselves into a tricky corner yet again, as MPs (Members of Parliament) voted against leaving the European Union without a deal in place. Commonly referred to as 'Hard Brexit', 'No Deal Brexit', or 'Cliff-Edge' Brexit, it's not happening - at least for now. This was not unexpected given that it would have come with considerable uncertainty. A 'Hard Brexit' would have meant the U.K. leaving the EU on March 29th as planned, but without the 21-month transition period to ease the departure and without the benefit of trading rules set up by the World Trade Organization to keep things orderly. Things are not particularly orderly in the U.K. right now, but a 'Hard Brexit' would only have made things worse.

What's Next

Thursday is a critical day, as Parliament will vote on whether to seek an extension beyond the March 29th Brexit deadline. It would effectively be asking for an extension to Article 50, which outlines the process for exiting the EU. But, as Prime Minister May told Parliament yesterday after her plan was rejected for the second time, the U.K. better have a solid back-up plan if she needs to head back to Brussels to request the delay. It does not appear that a back-up plan exists.

Of course, the U.K. can ask to be reinstated in the EU, but then it would have to defer to Article 49 of the EU, effectively applying for reinstatement.

Read our full Brexit overview here.

Learning from Greenland

Perhaps the U.K. should've learned a lesson from Greenland, which voted to leave the EU in 1982. It took over 100 meetings and three years for Greenland to finally leave the Union, and it's population is only 56,000.

For Eagles fans out there, the EU is starting to feel a lot like Hotel California. As Don Henley famously sang, "You can check out anytime you want, but you can never leave..."

We showed a chart yesterday of the blow to the U.K.'s GDP since it voted for Brexit two years ago. It's had a similar impact on the British equity market, as measured by the FTSE Index.

Boeing Grounded in the U.S. and Canada

The Federal Aviation Administration had stood by Boeing and decided not to ground the 737 Max Jet that has been an object of controversy since its second fatal crash in six months. That was until today, when President Trump weighed in. Trump ordered the 737 be taken out of service after speaking with Boeing's CEO, U.S. Transportation Secretary Elaine Chao, and the head of the FAA. Reportedly, the FAA discovered new evidence showing that the Ethiopian Air Jet crash this weekend was similar to the crash in October.

Canada's Transport Ministry also announced the grounding of all 737's today. 18 Canadians were aboard the Ethiopian Airlines flight which resulted in 157 casualties.

Shares of Boeing have fallen 11% in the past two trading days, erasing $26.6 billion in market value from the Dow component.

Juventus Wins, Stock Surges

I write this with the full knowledge that it will anger many soccer fans who either don't like Juventus, or its star striker Cristiano Ronaldo. I'm a lover of the game, but have no allegiance to the team or its star. I'm a goalkeeper, so give me Harald "Toni" Schumacher, any day.

This story got my attention because its one of those rare sports business stories where a star player can meaningfully impact a team's stock price. Such was the case with Ronaldo, who pulled off a hat trick against Atletico Madrid Tuesday night, propelling Juventus into the Champions League quarter finals.

Read More: The 5 Highest Paid Soccer Players

The victory earned Juventus 10.5 million euro for reaching the round of 8 after it earned 9.5 million euro for reaching the round of 16. All this helped boost shares of Juventus parent company Exor, the investment holding company controlled by Italy's Agnelli family. The stock, which goes by ticker symbol EXO on the Milan Stock Exchange, traded 17 percent higher following the win.

Juventus pays the 34 year-old Ronaldo 30 million euro a year, and paid Real Madrid, his former team, 100 million euro for his transfer rights. See the stock's action yesterday, below.

Chart of the Day: S&P 500 Hits New 5-Month High, Faces Technical Resistance

The S&P 500 (SPX) hit a new 5-month intraday high around 2821 on Wednesday before paring some of its gains and pulling back below key technical resistance around 2816. Driving the stock market higher on the S&P 500's fourth consecutive up-day were tech stocks, led by Nvidia (NVDA), which surged 3.75%.

Wednesday marked the fifth time that the S&P 500 has tested the major 2816 resistance area since mid-October. This year, the first two tests occurred in late February and early March. On both of those occasions, the S&P 500 promptly turned back to the downside. On Wednesday, the index was able to squeeze out a new intraday high, but was unable to sustain a confirmed breakout and close above that critical 2816 level.

From a technical analysis perspective, the more times a support or resistance level is tested and holds, the stronger that level becomes. The rest of this week will help decide whether this important technical level will be breached or respected. Any upside breakout will validate the market recovery from the late-December lows and increase the likelihood of a full recovery to September's 2940-area record high, and potentially above. Any failure to breakout, however, could send the S&P 500 back down towards its 200-day moving average.