Trump talk. President Trump is jaw boning the markets today. Over the weekend, it was interest rates and the Fed.  Yesterday, it was about the EU and China manipulating their currencies.  Both issues played into what equity markets want to see; lower interest rates and a lower U.S. dollar (USD).  Previously, the President pressured OPEC to pump more crude oil via tweets and talk.      

Speaking of oil, the US. Energy Information Administration (EIA) weekly petroleum report for the week ended August 10 saw a larger than expected build as imports increased by over 1 million barrels per day (bpd), to 9.0 million bpd, from the previous week.  Crude oil dropped $2 to $65 after the report.  Yesterday, the 10-Year U.S. Treasury yield declined 5 basis points following reports of the President’s comments at a fund raiser in the Hamptons.  Today, the Euro is trading higher vs the USD.  Coincidence or confidence in the Presidents intents?

Home building/construction stocks re leading the way higher.  The Home Construction Etf, ITB, is higher by 3.44%.  The group took its que from luxury home builder Toll Brothers (TOL).  TOL reported strong earnings and gave an upbeat outlook for the rest of the year.   The stock is trading higher by over 13%, while other stocks in the group are higher by 2-5%.   

Home building has been an under-owned sector of the market.  A change in sentiment within this group will aid the S&P 500 in challenging its previous high from January @ 2,872.87.  Currently, the S&P 500 is at 2,870.50, after trading has high as 2,873.23.  Lets see if it can close in new high territory.

Investors are rotating out of defensive sectors; utilities, health care and staples, as they rotate into more risker assets such as transportation, financials, technology and consumer discretionary/retail stocks.

• The Dow Transportation Index is trading higher by 0.75%, led by railroads
• The KBW Bank Index, BKX, is higher by 1.18% and breaking out
• The PHLX Semiconductor Index has stabilized and is higher by 1.85%
• The Retail Etf, XRT is higher by 0.96%

 Breadth: Bullish

• NYSE advances 1,966 to declines of 959; new 52-week highs 133 to new lows of 10
• Nasdaq advances 2,174 to declines 729; new 52-week highs 182 to new lows 26