Q4 Begins

The first day of the fourth quarter saw stocks trading a down a bit after Friday's strong performance. The cautious tone remains as investors digest economic data. The dollar is strong on the manufacturing data but some investors are concerned about the drop in U.S. construction spending which came in at -0.7% versus estimate of -0.3%.

I should say there were positives in construction (see table) off set by weakness associated with state and federal spending including transportation, power, highway and street, sewage, water supply, and conservation. 

Oil was green Monday with Brent breaking above $50 and U.S. crude at a 3 month high.  This is still optimism over the OPEC production cut deal moving prices higher and more and more signs top US players have made it through the crisis.

Market internals show decliners coming in at 60% vs advancers at 37% on the NYSE, but the total volume is light. Utilities were the worst performing sector Monday, down 1.72%, and that’s actually good news for the broader market.

M&A activity is interesting today with WGO (+$6.57) acquiring privately held Grand Design, after news Monday morning of CAB (+$8.09) being acquired by Bass Pro. Both deals have made for nice moves.   We should point out that Grand Design is only four years old but has brought excitement to a stodgy industry hence the huge move in Winnebago the acquiring company.