It was a slow and steady but very impressive session for the market on Friday.  After a couple of worrisome weeks, the Dow and S&P 500 finished at fresh all-time high points with all the major equity indices closing at the highs of the session. Every sector in the S&P 500 was higher on the session; even some of the bigger tech names regained equilibrium. There is a logjam to see which sector picks up the largest share of rotation and new money.

I continue to favor industrials where rails are beginning to take-off (pun intended) and defense contractors remain strong.

I also love the materials space where packaging names continue to shine; remember the demand for corrugated boxes? The demand has always been harbingers for the economy.

Consumer discretionary included homebuilders, which slipped on good news at Toll Brothers (TOL) as it faces chronic worker shortage, are poised for a strong 2018.

There was great economic data in America with the jobs report; there was strong data out of China, which sent steel prices higher.

Chinese Imports for November:

• Crude Oil +19.4%
• Natural Gas +12.7%
• Copper +20.5%
• Steel Products +20.0%
• Soybean +48.0%

The World Is On Fire

The global economic story isn’t told often enough, but it plays a major role in the performance of the stock market. Last month, Goldman Sachs (GS) released a report titled ‘As Good As It Gets,’ which makes stronger assumptions for global growth than consensus:

I think the numbers are too low with respect to the United States and even China, so it could get even better than good. 

On another note, there’s suddenly a lot of talk about the economy heating up too much. After a decade of mediocrity, this is the wrong time to be focused on curbing the surging economy. 

I can only hope the powers that be allow wage gains to kick in before derailing something more than those same old green shoots. 

Today’s Session

Equity futures have been higher all morning but lost momentum on reporters of a bomb going off in Port Authority Bus Terminal in New York.  The only person injured was the person police have taken into custody.  Beyond that incident, the focus returns on the race to get the GOP tax bill across the finish line as critics continue to try to derail the effort. 

Meanwhile, Bitcoin fever entered a new phase with futures trading last night on the CBOE.  That move was supposed to send the cryptocurrency lower.  Instead, it surged, as demand was so powerful trading halted twice. 

Let’s not force the issue this morning.  I have a few fresh ideas high on my list, but I also like how the model portfolio is positioned. If you are not a subscriber to our Hotline Service, call your representative or email us at info@wstreet.com to get started today.