Yesterday was another impressive session that would have gone completely the other way if it were a month earlier. The change in sentiment has been an amazing factor in the 2019 rally. It’s not about ebullience but normal thinking and reacting to news and potential news. The knee-jerk worst-case scenario reactions are gone, and that’s great for investors.
Only three segments finished the session lower, while buying was distributed rather evenly.
S&P 500 Index +0.14%
Communication Services (XLC) +0.46%
Consumer Discretionary (XLY) +0.42%
Consumer Staples (XLP) -1.24%
Energy (XLE) +0.53%
Financials (XLF) +0.23%
Health Care (XLV) -0.85%
Industrials (XLI) +0.51%
Materials (XLB) -0.53%
Real Estate (XLRE) +0.40%
Technology (XLK) +0.84%
Utilities (XLU) +0.52%
Market breadth was even more encouraging.
NYSE
- 2,002 winners
- 961 losers
- 2.2 billion Up volume
- 1.2 billion Down volume
NASDAQ
- 1,883 winners
- 1,146 losers
- 1.5 billion Up volume
- 836 million Down volume
This morning, earnings are mixed. Intel (INTC) is the biggest loser, while Starbucks (SBUX) is the biggest winner. The news from Starbucks made me tweet this out this morning:
Message to American Business via Starbucks Earnings
Starbucks just posted its best quarter ever in America in large part by bringing back holiday cups without political subtext or identity politics. Stop preaching to your customers -we don't need or want corporate virtue signal.
Jay Powell’s Next Big Move?
The really big speculation today is the Fed may pause or alter its quantitative tightening program. This would be huge, and it would allow the economic rebound to flourish and impact more lives.
Portfolio Approach
We took no actions yesterday, although we were tempted to ring the register a few times. This looks like what could be a significant breakout where current winners could significantly outperform.
Today, we are making some changes to the PA. We are reducing Cash to 2 from 3 and increasing Industrial to 4 from 3.
Communication Services | Consumer Discretionary | Consumer Staples |
2 | 3 | 1 |
Energy | Financials | Healthcare |
1 | 1 | 1 |
Industrial | Materials | Real Estate |
4 | 4 | 0 |
Technology | Utilities | Cash |
1 | 0 | 2 |
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