Yesterday was an emphatic session. In other words, “Bam!”

The market rallied hard, with Technology (XLK) and Communication Services (XLC) trailing behind big- time. Old-school safe havens ruled as Utilities (XLU) and Real Estate (XLRE) popped.

Market breadth was very impressive, especially new highs to lows on the New York Stock Exchange (NYSE). Moreover, the up volume swamped the down volume. That’s what we call conviction.

Market Breadth	NYSE	NASDAQ
Advancers	2,335	3,079
Decliners	499	1,150
New Highs	240	178
New Lows	12	78
Up Volume	3.24 billion	3.51 billion
Down Volume	586.47 million	1.22 billion

More names are participating, which makes it harder to stay out, particularly the smart money that has been reluctant to dive into this market since the end of 2022. Now, 80% of stocks are changing hands above their 200-day moving average.

The same tide is lifting all boats across various asset classes, and that’s how it’s supposed to happen.

Messages from the Foxhole

You are going to hear even more doom and gloom. Coupled with natural instincts that things are too good to be true and juxtaposing the market to the economy, folks will want to sell. 

However, understand the key is to be in the mix, but try to stay ahead of the curve with an active rebalancing of the portfolio. (If you are not a current subscriber to our premium Hotline service, email Info@wstreet.com or ask your rep about the Portfolio Tracker and our Portfolio Approach for the latest sector and idea weight.)

Doomsday Crowd

Also, be careful of the doomsday crowd that has been so wrong. Their only course of action is to attempt to jawbone investors and drive the market lower. JPMorgan (JPM) must believe in that “stock” because the firm continues to have the lowest year-end target on the market.

Listen to the message of the market, stay nimble, but stay in the game.

Portfolio Approach

We closed a position in Industrial and Technology, and we are adding a new position to Healthcare this morning to the Hotline Model Portfolio.

Today’s Session

The final read on Fourth Quarter GDP came in higher than expected with consumption leading the way. It is backward looking at this point, but it adds to the stock market narrative (see cyclical over defensive) the economy is edging higher not lower.

There is no doubt older, wealthier Americans are spending, and will continue to spend (see outlook from Hardware), but the majority can’t keep up the pace against stubborn inflation and fading savings.

The rally baton continues to move nicely from tech to the rest.

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