Daily Market Wrap

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The S&P 500 finished slightly higher closing up 0.27% on the first day of earnings season. Alcoa kicked off earnings last night with an earnings report that was in line with expectations. Management gave better than expected guidance. There were specific statements made about business in China being better than expected. There was also an upside positive preannouncement from China’s largest steel firm.

Industrials were the best performing sector on the day climbing by more than 1%. Danaher issued a positive preannouncement and fears regarding Boeing’s 787 are waning. Early stage cyclicals and multi-line industrials were up close to 1%. Late stage names were also up but not quite as strongly. Agricultural equipment and engine maker names were also up nicely on the day. Aerospace/defense names continued to trade higher after the move higher in the fourth quarter.

The rails continued to move higher after some small railroads issued better than expected earnings announcements. Parcel delivering names and the airlines also outperformed the market.

Home builders and building material stock names continue to surge higher. Home builders were up between 1.5%-2.5% and building products names were also higher on the day.

Energy traded lower on the day. Crude oil traded 0.25% lower and natural gas was off by 3.25% after inventory data came in worse than expected.

Payment processing stocks moved higher again today. Visa was added to Goldman Sachs conviction buy list and MasterCard received an upgrade from Goldman.

There was some rotation out of the banking sector today. Banks have been outperforming during this latest move higher in the market. Bank of America has been a particular standout. BAC traded off by 4% today in response to an analyst downgrade.

Source: PFS Group

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