Monday, the market finished the day higher even as it’s clear that Janet Yellen is wedded to the idea of rate hikes this year; maybe even in July or September. Apparently, investors are taking the Fed Chair at her word relying on ‘incoming’ data. Still, angst is reflected in the massive amount of blue chip stocks hitting new 52-week highs as investors are looking to get skin in the game with names they know.
The same is true for NASDAQ, which was driven higher by the same tech names that appeared to run out of gas earlier this year.
Market Breadth |
NYSE |
NASD |
New Highs |
176 |
90 |
New Lows |
9 |
28 |
Advancers |
68% |
68% |
Decliners |
29% |
29% |
I love the action in the dirty fingernail stocks; I think crude oil breaking through $50.00 will result in a lot of stocks popping 20% or more. Due to crude oil reactions to violence in Nigeria, many nations that want to pump more don’t have the infrastructure to pump more; those shut-in rigs in North America won’t be automatically switched back on.
Key S&P Sectors |
Day |
YTD |
Energy |
+2.21% |
+10.31% |
Materials |
+1.09% |
+9.77% |
Industrials |
+0.95% |
+5.62% |
It’s not just crude oil, it’s commodities in general that are looking much better, and the general conclusion is that this isn’t a Chinese play-it’s a legitimate signal of improvement.
The most compelling ideas across this spectrum haven’t done anything fundamentally to make anyone rush in; by the same token, they are so cheap that it’s hard to ignore the upside potential. The Commodity Research Bureau (CRB) Index is technically in a bull market from a double bottom earlier in the year, and it has taken out a ton of key resistance points.
