- WTI Oil: +0.77%
- S&P 500: +0.37%
- DJIA: +0.25%
- NASDAQ: +0.34
- Russell 2000: +0.67
- 10-Year Bond Yield: +0.35%
There is no doubt that yesterday suffered from the Monday morning blahs. However, as the session moved along, all major equity indices gained traction to rally into the close, while West Texas Intermediate (WTI) was the best performing asset. A move through $60.00 could see a quick spike toward $65.00.
Because of oil’s big move, and some upgrades, Energy was the best performing sector in the S&P. In that sector, I continue to favor the Permian Basin (PBT) names. Not only does the region hold an amazing promise, but I also suspect continued efforts by the major players to make major acquisitions.
Favorite names include:
- Concho Resources (CXO)
- EOG Resources (EOG)
- Pioneer Natural Resources (PXD)
Financials continue to look attractive with the Fed potentially signaling an end or tapering of quantitative tightening (QT).
Also, keep an eye on Industrials where some bottom fishing is going on, sending FedEx (FDX) and General Electric (GE) shares higher.
S&P 500 Index | +0.37% |
Communication Services (XLC) | -0.85% |
Consumer Discretionary (XLY) | +0.97% |
Consumer Staples (XLP) | +0.15% |
Energy (XLE) | +1.39% |
Financials (XLF) | +1.01% |
Health Care (XLV) | -0.15% |
Industrials (XLI) | +0.97% |
Materials (XLB) | +0.23% |
Real Estate (XLRE) | -0.51% |
Technology (XLK) | +0.42% |
Utilities (XLU) | -0.38% |
Overall, it was an impressive session, considering there could have been consolidation after last week.
Portfolio Approach
We are looking to be more aggressive in the model portfolio. We just need to see one last technical hurdle cleared.
Communication Services 1 | Consumer Discretionary 4 | Consumer Staples 1 |
Energy 1 | Financials 1 | Healthcare 2 |
Industrial 3 | Materials 3 | Real Estate 0 |
Technology 2 | Utilities 0 | Cash 2 |
Today’s Session
Equities are pointing higher as investors begin to anticipate an even more accommodative Federal Reserve. Wall Street is hoping to get signs tomorrow that quantitative tightening will be curbed or paused sometime over the summer.
President Trump released his economic update for 2018 reflecting one of the best years for the economy in a long time, including 3.1% four-quarter GDP growth.
President Trump’s economy report seems to have three goals.
1. Highlight economic success in 2018
2. Warn of the dangers of the socialism-like democrat proposals
3. Extend opportunity via infrastructure deal
The administration also pointed to the edging higher of productivity, which is a critical problem for the country that must be remedied to get longer term sustained economic growth.
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