Don’t look now but the ART OF THE DEAL is beginning to bear fruit as President Trump signs a bi-partisan spending bill that puts $1.37 billion toward border wall funding and averts a government shutdown.   Meanwhile, by all accounts (except NY Times), the U.S. - China negotiations in Beijing went well, and hasten meetings next week in Washington D.C.

The stock market loves these developments, which also allow investors to focus on fundamentals and valuations.

Don’t look now, but the Dow Jones Industrial Average and S&P 500 are in the shadows of their all-time highs achieved last year.

• DJIA -4.3% off the high
• S&P -5.9% off the high

This seems very sudden, and it’s very exciting.  There have been some decisive winners and losers in certain industries:

• Pepsi (PEP) is rocking today after Coke (KO) fizzled yesterday
• Barbie and Hot Wheels sent Mattel (MAT) higher as Hasbro (HAS) melted like Play-Doh Ice Cream
• United Airlines (UA) took off while Delta’s (DAL) earnings kept its shares stuck at the gate

But the real story is this rally has been like a block party, and just about every stock is rocking.

This is distinctly different than the 2017 - 2018 rally that was essentially carried by a half dozen companies.  Even at the high point of last year, there were more losers than winners on the S&P 500.

The 2019 Rally Highlights:

• 471 winners
• 42 losers
• 95 up 20% or more

The biggest winners were among 2018 biggest losers:

• Coty +69%
• MAT +68%
• XRX +53%
• HBI +49%

Even today’s monster rally is being led by financials, which in turn are higher on earnings from Moody’s (MCO).  I have been asking this question since last year, if the market could rally without the leadership of big tech and momentum names. 

The answer thus far has been a resounding yes.  But will investors be able to throw darts and hit winners for the reminder of the year?  The answer is no.  There were a lot of extremely oversold stocks coming into the New Year.

Initial bounces while providing amazing gains could be limited.