U.S. Equity Market Radar (April 15, 2013)
The S&P 500 roared back this week setting new highs and rising by more than 2 percent for the week. The catalyst for the market appeared to be positive economic data out of China and the reassurance that the Federal Reserve’s current quantitative easing (QE) policy will continue.
Strengths
- The consumer discretion sector was the leader this week as automobile manufacturers, casinos, gaming and internet retailing industry groups were among the best performers. Same store sales data for the retailers were released this week and were generally better than feared due to an unusually cold March. This allowed numerous retail names to rally including L Brands and Ross Stores.
- The healthcare sector was also strong as the biotech names continue an impressive run up. Gilead Sciences, Amgen, Biogen Idec and Celgene Corp. were all very strong performers this week.
- First Solar Inc. rocketed 40 percent and was the best performer in the S&P 500 this week. At the company’s analyst day in New York City, the company raised 2013 earnings guidance as well as estimates for 2014 and 2015.
Weaknesses
- Best Buy reversed course this week, falling over 5 percent, but that was after last week’s roughly 15 percent gain.
- J.C. Penney also fell by more than 5 percent this week as the company ousted its high profile CEO and is attempting to raise as much as $1 billion in financing.
- Newmont Mining was the worst performer in the S&P 500 this week declining 7.6 percent as gold stocks endured a tough week.
Opportunity
- The market is climbing that proverbial wall of worry and just shakes off any bad news.
- 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.
