The S&P 500 eked out a gain yesterday, except for the workhorses and Real Estate (XLRE), which has its own problems). But it seemed more like oversold bounces rather than the start of sustained gains.

It takes lots of green to overcome those huge red patches.

The 1960s Comes Back

Imagine if you could go into a time machine and start investing in 1960. What would you buy?  Many would buy oil equipment, banks, coal. And paper, railroads, tires, life insurance, airlines and broadcasting stocks would have been a slam dunk. Back then, these were sexy investments, but they are afterthoughts today. Perhaps we take them for granted, but they had a day in the sun yesterday to remind us.

Those old 1960s names dominated the biggest gainers list.

But what is amazing is these products and services are as critically important today as they were back then. Platforms and deliveries have changed for publishing. Wile tobacco is down a lot in the United States, we still need oil, rails, tires, marine transportation, trucking and heavy construction.

Coming into the week, Technology (XLK) was alone in the plus column for the month. So far, the market has either been up or lots of cash has come out of equities. 

The S&P 500 has held at key points and is up three straight sessions, but you have to go back to mid-January to find the last four day rally. Something will break – either getting through a wall of resistance at 4,000 to 4,200 or failing at 3,900.

Recession Watch

The steepening of yield curves has been remarkable and harkens back to late 2008.

You must believe the Fed sees this, and so many other things, and will eschew the over-reliance on faulty government data.

Today, the Federal Reserve Board Vice Chair for Supervision, Michael Barr, will testify before the Senate Committee on Finance on the health of banks and what has gone wrong thus far.

Not sure Barr will explain why the government bailed out billionaires, but I implore lawmakers to hold his feet to the fire.

The result of course is more money coming out of banks, and fewer loans, as they circle the wagons to wait out the scare.

Economic Calendar

Portfolio Approach

There are no sector weighting changes to our Hotline Model Portfolio this morning.

Today’s Session

Ahead of the jobs report next week, there are more signs layoffs are spreading. While many in tech find new employment, the fact is, more and more and other non-tech workers will be sidelined for a while.

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Wholesale inventories are not budging month to month, but are higher from a year ago, especially retail inventories.

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