It was a pretty good Monday session that saw the same good news/bad news quandary.

Good News: Resolve

Buyers continue to show on dips, as few sessions see major indices close at session lows. On the contrary, last Friday, investors had a large enough excuse to sell stocks into the weekend, but buyers materialized in the waning moments of the session.

Bad News: Oomph

The lack of oomph continues to haunt the market, which has meandered in the shadows of the all-time high for weeks, and now can’t find a way to get over the hump. Yesterday, the market shook off anxiety and a big miss on the Chicago Purchasing Managers Index (PMI). It looked as if the Dow Jones Industrial Average could rally 200 points. The index and overall market faded into the close.

Buying was evenly distributed with Technology leading the way.

S&P 500 Index	+0.50%
Communication Services (XLC)	+0.51%
Consumer Discretionary (XLY)	+0.86%
Consumer Staples (XLP)	+0.49%
Energy (XLE)		-0.72%
Financials (XLF)		-0.25%
Health Care (XLV)	+0.90%
Industrials (XLI)	+0.14%
Materials (XLB)	+0.85%
Real Estate (XLRE)	+0.13%
Technology (XLK)	+1.05%
Utilities (XLU)	+0.06%

 

The Tables Have Turned: Value is Momentum and Momentum is Value

Home Sweet Home

Homebuilders have become a momentum juggernaut, driving the U.S. Home Construction Index +44.2% year-to-date, and appear to have a lot more room to the upside.

• D.R. Horton Inc                    DHI          13.62%
• Lennar Corp                         LEN         11.80%
• NVR Inc                               NVR           9.86%
• PulteGroup Inc                    PHM          6.99%
• Lowe's   Inc                         LOW          4.92%
• Home Depot                        HD             4.84%
• Sherwin-Williams                SHW          4.70%
• Toll Brothers Inc                  TOL           3.88%
• Masco Corp                         MAS          2.96%
• Top Build Corp                     BLD           2.59%

ITB Index

Chipping Away

An index that’s changing hands at a forward price-to-earnings (forward P/E) ratio of 44.9% isn’t exactly a value, but semiconductors have been in enough of a rut lately. Some are wondering if they are oversold.

Yesterday, two separate analysts, both citing trips to Asia, voiced cautious optimism that chip demand is better than many believe, and trade developments could have an immediate positive impact.

• NVIDIA Corp                          NVDA           8.57%
• Texas Instruments                 TXN               8.23%
• Qualcomm Inc                       QCOM           8.07%
• Broadcom Inc                        AVGO            7.79%
• Intel Corp                               INTC             7.46%
• Micron Technology                MU                 4.81%
• Applied Materials                   AMAT             4.30%
• Lam Research Corp              LRCX              4.18%
• NXP Semiconductors            NXPI               4.02%
• KLA Corp                               KLAC              4.00%

Philadelphia Semiconductor Index

Parade of the Penguins

Today sees the start of another week of jawboning from Federal Reserve officials. Yesterday in Asia, Charles Evans seemed more open to lower rates, so perhaps he can move the needle. Or perhaps someone else will, as they have had a chance…or two.

Tuesday Evans Clarida Bowman

Wednesday Barkin Harken Williams

Thursday Evans Quarles Mester Kaplan Clarida

Friday Rosengren Bostic Powell George

Today's Session

Stocks opened higher as the last quarter of the year kicks off. Financials are leading the way, as yields rose broadly.

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