Trump Rally Extends, Financials and Techs Lead

Trump Rally Extends, Financials and Techs Lead

Trump Rally Extends, Financials and Techs Lead

$DIA, $SPY, $QQQ, $VXX

US stocks rose Monday as investors bought banks and  technology company stocks, which have been mostly left out of a post-election rally.

The DJIA marked another record high.

Energy companies rose as the price of Crude Oil reached its highest marks since July 2015.

Small-company stocks are outpacing the broad market.

Investors are moving money away from safe-play stocks, and favoring companies that stand to do the best when economic growth picks up steam, as it did in Q-3. Investors expect that trend to continue.

The DJIA rose 45.82 points, or 0.2%, to 19,216.24.

The Standard & Poor’s 500 index rose 12.76 points, or 0.6%, to 2,204.71.

The NAS Comp added 53.24 points, or 1%, to 5,308.89.

The Russell 2000 index rose 23.53 points, or 1.8%, to 1,337.79.

The Russell is up 18% YTD, more than 2X the S&P 500. Smaller companies, which are more domestically focused than large multinationals, could stand to benefit more than larger ones from a pickup in US growth.

Banks resumed their post-election rally and are trading at their highest levels since early Y 2008.

Goldman Sachs (NYSE:GS) gained $5.19, or 2.3%, to $228.55, a 9-year high. Banks are on a 4-week winning streak since Donald Trump was elected US President.

Tech stocks are down about 1% since the election as investors have wondered about the effects of President Elect Donald Trump’s potential trade policies. Tech stocks marked all-time highs earlier this year.

Crude Oil prices rose for a 4th day running.

The price of Crude Oil has risen since OPEC finalized a deal that will trim oil production starting in January.

WTI Crude Oil rose 11 cents to 51.79 bbl in New York Monday

Brent Crude Oil gained 48 cents to 54.94 bbl in London Monday

Consumer-focused companies also did better than the rest of the market. Amazon (NASDAQ:AMZN) rose 19.02, or 2.6%, to 759.36. Monday the online retail giant said it is testing a grocery store model that works without checkout lines.

Healthcare stocks posted the biggest losses.

US Treasury prices recovered from a sharp fall earlier in the day and finished just a bit lower. The yield on the benchmark 10-year T-Note edged up to 2.40% from 2.39% late Friday.

Italian voters rejected proposed changes to the nation’s constitution Sunday, causing political and economic uncertainty for Europe’s 4th-largest economy. Premier Matteo Renzi resigned.

UniCredit, the biggest bank in Italy, lost 3% in Milan. Monte dei Paschi di Siena, the country’s 3rd-biggest lender, dove 4%. .

Italian stocks did not move much overall, and the FTSE MIB index slipped 0.2%.

Germany’s DAX added 1.6% and France’s CAC-40 gained 1%.

The FTSE 100 advanced 0.2%.

  • Russell 2000 +17.7% YTD
  • DJIA +10.3% YTD
  • S&P 500 +7.9% YTD
  • NAS Comp +6.0% YTD

Sunday, the US Army Corps of Engineers denied a permit for the Dakota Access oil pipeline in North Dakota.  It is the last major piece of construction (1.4 mile) on the $3.8-B pipeline. The companies involved in the pipeline criticized the Obama Admin’s decision.

I expect the Trump Administration to overturn the decision after Donald Trump takes office in January 2017, as all legal requirement have been argued, and met for completion. The anti-Fossil Fuel Energy Obama Admin is over.

HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.46) Bullish (0.31) Very Bullish (0.60) Bullish (0.47)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.30) Bullish (0.28) Bullish (0.42) Neutral (0.19)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (-0.05) Neutral (-0.10) Neutral (-0.12) Neutral (0.06)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.35) Bearish (-0.31) Bearish (-0.42) Bearish (-0.33)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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