The S&P 500 never varied more than a few points from unchanged all day. There was no change at the margin on the macro front concerning Europe or our fiscal cliff. There was very little corporate or economic news announced today that could move the market.
It is now becoming clearer to people that the soft deadline for the fiscal cliff is December 15th. That is the beginning of vacation for the powers that be in D.C. Historically big issues that the power brokers need to hash out prior to year end get ironed out near the start of the holidays for our lawmakers.
Technology and financials underperformed today. There was an investor conference hosted by Goldman Sachs today focusing on the financial sector. No great positive news came out of the meeting and financials were weaker today. Bank of America bucked that trend and traded up by more than 1%. Apple led technology lower today. The company was hurt by rumors concerning the launch of a low-end iPhone. This hurt the stock on concerns that the launch would hurt margins.
European stocks again outperformed the domestic stock market. The Dow Jones Euro Stoxx 50 is now roughly 6% higher relative to the S&P 500 this quarter. Reduced fears over debt issues in Europe and strategists forecasts for higher growth for the region in 2013 boosted European stocks today.
Commodities were mostly lower with precious metals, crude, grains and natural gas all trading lower on the day. Gold was off by slightly more than 1% and silver was punished, traded off by more than 2%.
Homebuilders traded higher in the last few hours of trading as Toll Brothers made comments that were favorably received by the market. On the company’s conference call they said that traffic is still slightly weak but conversion rates are very strong. They feel that when traffic improves they will see pricing power rise sharply.
Transports traded well ahead of the tape today on strength from airlines, rails and parcels. Both UPS and FedEx traded higher ahead of anticipated strong shipping numbers for the holiday season. Positive news from Canadian Pacific had a favorable impact on the rails.
Healthcare outperformed the broader market as pharma stocks rallied. Traditional large cap healthcare names like Pfizer, Johnson & Johnson and Merck and Eli Lilly all closed higher on the day.
Source: PFS Group
