Coming into the week, everyone’s talking about a Santa Claus Rally, defined as an up period for the stock market that starts with the last week of the year to the end of the second week in the New Year.  Without a doubt, market bias is overwhelming to the upside, and there is a great urgency to get in the mix.

More than likely, if we get the Santa Rally, it won’t be reindeer, but those killer whale momentum stocks known as FANG (Facebook, Apple, Netflix, and Google). They led the way last week, lifting the Consumer Discretionary well above all other sectors. Netflix (NFLX) was the bigger winner, followed by Facebook (FB).

Today, we get the latest read on durable goods. More importantly for the market, it will tell us about nondefense capital goods orders, excluding aircraft business investment. The October number beat Wall Street consensus, rebounding off the second lowest read of 2019. The Street is looking for a -0.3% decline for November.

New Home sales results are also being released today, and while this is smaller than existing homes, we should get clues from pricing on the overall housing trend

Portfolio Approach

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Today’s Session

The major indices are in the green, albeit slightly.   Boeing’s (BA) CEO, Dennis Muilenburg, is resigning and the current Chairman David Calhoun will replace him effective January 13.  Boeing plans to work hard to restore and repair relationships with is customers, regulators, and shareholders.  BA is up over $10 on the news.

In economic news, Durable Goods orders dropped 2% from the prior month, and October was revised up 0.2%.  Excluding transportation, durable goods were unchanged, as projected, and October was revised higher by 0.3%. A proxy for business spending, Non-defense capital goods, excluding aircraft, increased 0.1%, and year over year is up 0.7%.

New Orders

• Primary metals - 0.3%
• Fabricated metal products +0.4%
• Machinery -1.6%.
• Transportation equipment -5%