Once again material names, led by construction and chemical companies, stand out as the stealth rally in the sector is becoming more noticeable, particularly as investors seek out potential winners from lower domestic tax rates.  

The other compelling aspect of the session is early resolve staving off initial weakness.

Restaurants will also see a major boost to their bottom line with a 20% top rate on corporate taxes.   McDonald’s is having one of its best sessions of the year, as well as several other names in the industry trading higher as well.

Future Implications

International Trade

There is lots of data out today, including August trade deficit of $62.9 billion versus consensus of -$65.7 billion, as exports climbed faster than expected.   This is good news for the third quarter GDP, which has drifted a lot over the past month.

Manufacturing

The Kansas Fed Manufacturing report was mixed, but overall it is flashing good signs of things to come.

• Shipments 25 +2
• Employment 18 +4
• New Orders 10 -5
• Selling Prices 13 +5

Pricing power and higher employment are the perfect one-two punch when it comes to generating economic activity.

Let’s stay on the sidelines for the rest of the session.