Afternoon Note
This morning, Fastenal (FAST) posted its earnings results, and many that were bracing for a manufacturing recession to drag the entire economy lower, let out a big sigh of relief. The company posted results that beat on top and bottom lines, and while management acknowledged a slowdown, the results dismissed the idea the bottom has fallen out.
Fastenal: About Us
Today, Fastenal is many things to many different customers: an expert consultant, a logistics company, a technology provider, and more generally, a distributor of wide-ranging industrial and construction products. These aspects of our service share a common foundation: great people, close to our customers.
Our service model centers on approximately 3,200 in-market locations (a combination of public branches and customer-specific on sites), each providing custom inventory and a dedicated sales team to support local customers.
The news has sent FAST shares +17%, leading the way for Industrials to be the second-best performing sector in today’s session. Note: Materials are the best performing sector on this manufacturing relief and investors search for value. The Industrial sector (XLI) has been ranged-bound since late 2018, so while this is a welcomed move, there’s more to go before a breakout confirms the worst is over.
XLI
Investors are rotating out of safe havens Utilities, Real Estate and Consumer Staples, but long-term investors should take care to remove that balance from their portfolios.
S&P 500 Index |
+1.43% |
|
Communication Services (XLC) |
+1.69% |
|
Consumer Discretionary (XLY) |
+1.51% |
|
Consumer Staples (XLP) |
+0.05% |
|
Energy (XLE) |
+1.49% |
|
Financials (XLF) |
+1.89% |
|
Health Care (XLV) |
+1.45% |
|
Industrials (XLI) |
+2.06% |
|
Materials (XLB) |
+2.43% |
|
Real Estate (XLRE) |
+0.28% |
|
Technology (XLK) |
+1.58% |
|
Utilities (XLU) |
-0.09% |
Donald J. Trump @realDonaldTrump Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen! 9:49 AM - Oct 11, 2019 |
President Trump will meet with China’s Vice Premier Liu He around 2:45, and they are scheduled to discuss trade for 85-minutes. So far, it feels like this could be the inflection point that gets trade negotiations back on track.
This isn’t a “skinny deal. ” It’s a step in the process that should make the remaining negotiations run smoother.
Comments |
The Art of the Deal writ large! Could not agree more with your assessment, Charles. Thank you! Dennis Paine on 10/13/2019 5:18:06 PM |
Tweet |
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