U.S. Equity Market Radar (February 11, 2013)
The market ended higher for the sixth week in a row and continues to power ahead. Earnings season is winding down and earnings have been well received. With earnings more or less in the rearview mirror, focus will likely shift back to macro factors influencing the market which could potentially add volatility.
Strengths
- The consumer staples sector led the way this week with broad based strength. Food related stocks have been strong all year with household names such as Tyson Foods, Hormel Foods and Dean Foods among year-to-date leaders.
- Technology was also strong this week led by FLIR Systems, First Solar and Electronic Arts. Apple was also a strong performer this week on talk of returning more cash to shareholders.
- FLIR Systems was the best performer in the S&P 500 this week rising 12.19 percent. The company reported mixed results but the outlook for 2013 was strong.
Weaknesses
- The telecom services sector was the worst performer but the losses were modest and likely just taking a breather after strong performance the past two weeks.
- The materials sector was among the worst performers for the second week in a row with continued weakness in the chemicals complex with FMC Corp, CF Industries and PPG Industries among the worst performers.
- McGraw-Hill was the worst performer in the S&P 500 this week losing 26.9 percent. The Department of Justice is filing a civil case against Standard & Poorās (a McGraw-Hill subsidiary) in relation to mortgage ratings.
Opportunity
- Earnings will begin to wind down next week but there are still notable names that will report including Coca-Cola, Cisco Systems and PepsiCo.
Threat
- After the best January in more than 20 years a pullback would almost be expected.
