U.S. Equity Market Radar (April 8, 2013)
The S&P 500 took a breather this week after a strong start to the year, falling about one percent this week. Domestic and dividend focused areas outperformed again with telecom and utilities leading the way.
Strengths
- Dividend paying stocks continue to attract fund flows as every constituent in the telecom sector was up this week. AT&T was a leader rising by 3.6 percent.
- The dividend/domestic theme also followed through in the S&P 500 utilities sector as investors continue to favor dividend payers with U.S. centric revenue exposure.
- Best Buy Inc. jumped nearly 15 percent and was the best performer in the S&P 500 this week as the company announced a store-in-a-store concept with Samsung. The deal was viewed as a positive for both companies.
Weaknesses
- The technology sector was the worst performer with somewhat broad based weakness. F5 Networks, Advanced Micro Devices, Teradata Corp. and Hewlett-Packard were among the worst performers.
- The materials sector didn’t fare much better as every stock in the sector was down for the week on concerns of a slowing macro environment. U.S. Steel, Sealed Air Corp. and Owens-Illinois were among the worst performers.
- F5 Networks Inc. was the worst performer in the S&P 500 this week declining 17.8 percent. The company reported preliminary quarterly results showing slowing North American sales. Indicated revenue and profits were well below analysts estimates.
Opportunity
- The market continues to be resilient regardless of the news out of Europe and the market is climbing that proverbial wall of worry.
- Global central banks are literally pulling out all the stops in an attempt to ignite economic growth.
Threat
- A market consolidation wouldn’t be a surprise after a strong start to the year.
