- The consumer staples stocks have continued to perform in-line with the S&P 500 since early March. Investors should consider adding exposure to this sector…as it should provide upside (market-sized) returns if the broad market continues to rally going forward….AND provide downside protection if the market sees a correction.
- A week ago, we said the chip stocks were at a key technical juncture. Right now, there are signs the situation is going to resolve itself to the downside…but we’ll have to see more downside follow-through to confirm a change in trend.
- Richmond Fed President Barken made some comments yesterday that emboldened our view that the Fed is going to wait until long-term yields are higher…and THEN start “talking about” tapering back on QE (so that they can say that it’s already priced-in). Thus, do not wait for a Fed “tapering” announcement before you start expecting higher-long-term rates….especially since Dallas Fed President laid more groundwork for a tapering move over last weekend.
It was a bit of a mixed day in the stock market yesterday….as the DJIA, S&P 500 and Russell 2000 all rallied, but the tech laden Nasdaq fell by about 0.5%. We’d also note that the S&P gave back more than half of its early morning gains by the close…and finished the day near the lows. All of this took place on low volume and breadth that was nothing special, so it was not the most compelling day we’ve ever seen for the broad stock market.
We did, however, see some noticeable moves in several different groups. The energy stocks saw a strong rally…and the industrials and material stocks were able to move nicely higher as well. It was interesting to note that the consumer staples also had a good day…as the XLP consumer staples ETF experienced some further gains. ...