Record Market Leaves No Room For Pessimists

We start today with major indices opening at all-time highs and participants extremely optimistic.

Energy continues to be in its own orbit, powering higher on the latest cold front that blanketed the nation.  Meanwhile, Communication Services and Technology also act great.  By the same token, investors are eschewing traditional safe havens Utilities and Consumer Staples, which have struggled.

With earnings season more than halfway over, and bonanza results, it’s harder to argue for a pullback other than the typical knee-jerk assumption that every time the market rallies its due for a pullback.  The monthly Bank of America global money manager survey on bearishness stated: “Bottom line: the only reason to be bearish is…there is no reason to be bearish”

Bank of America Survey has seen a serious push into two sectors we have been very bullish on for months: Industrials and Materials.  The latter should get a nice boost from reaction to Vulcan Materials (VMC)

To see the chart, click here.

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Today’s Session

Covid-19 cases are moving on right direction.

Continued momentum in vaccine distribution and a sharp decline in Covid-19 cases haven’t had the impact one might have assumed, as many reopening and normalization stocks continue to lag. On Friday, Live Nation (LYV) shares closed at a record high, but several other names that would benefit from reopening were down for the week.

Conversely, many of the so-called lockdown names posted strong gains for the week.

Economic data continues to come in stronger including Empire State Manufacturing Survey (we’ll have details on the afternoon note).