Nine Wins in Eleven Sessions

The stock market is up again this morning. This could be the ninth up day in the last 11 sessions. We’re also seeing a continuation of the theme of strong cyclical stocks. The Energy Sector is doing very well so far. Industrials and Financials are also leading the pack. This may suggest that Wall Street believes the economy has turned around. We’ll see.

The Federal Reserve meets tomorrow and on Wednesday. This meeting will also have a press conference by Chairman Powell. I don’t expect any major policy changes from the Fed, but it will be interesting to hear what Powell has to say.

I want to reiterate a point I made in the newsletter — cyclicals stocks are starting to lead the market impressively over the last month. This could suggest Wall Street sees a faster-than-expected recovery.

The graph above is the four main cyclical sector ETFs divided by the SPY. Notice also that the 2/10 Spread has gotten wider.

Posted by on June 8th, 2020 at 10:36 am


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