Daily Market Recap

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Stocks continued to drift sideways as investors lack conviction. Technology, healthcare and materials outperformed the broader market and consumer discretionary stocks trailed. The overall tech sector is benefitting from the weakness in Apple. Investors are rotating out of Apple into other technology issues. Semiconductors, software, and networkers all worked higher today in the tech space. Materials and transports outperformed after China data overnight came in better than expected. This is the most recent of many positive data points regarding the Chinese economy. Consumer discretionary stocks were lower as data released today pointed to slower ecommerce spending last week.

Some were tacking the lack of news from the fiscal cliff arena as a positive. The Wall Street Journal reported today that there has been steady progress in the talks. The lack of leaks is a sign that both parties are grinding out the details. An increasing amount of Republicans are urging the GOP to concede on income tax hikes and focus their efforts on entitlement programs. The Journal story says that talks have become far more substantive in the past few days.

China’s Shanghai Composite advanced 1.1% after stronger than expected November economic numbers were released. Investors are optimistic that further economic, pro-growth, reforms will be coming from the new government. 

Commodities were mostly weaker today with grains, crude oil and natural gas underperforming, while precious metals and copper were higher today. Gold and silver both closed higher by 0.50%. 

Financials ended the day lower after an aggressive advance last week. There was little in the way of news flow regarding the sector after several major announcements last week. Large money center banks were the big winners last week, they were mostly off today. AIG traded 2% lower after they revealed Hurricane Sandy related losses were higher than expected.

Improved numbers from China and better sentiment regarding the fiscal cliff were helpful for the industrial sector today. The sector was up 0.50%. Early cycle names traded ahead of the overall sector. Machinery and capital equipment names traded higher on the release of China’s preliminary trade data that showed a strong rebound in demand for iron ore and copper. 

The transportation sector traded higher by close to 1%. Truckers, airlines, rails and parcels continued to advance ahead of the tape. Federal Express was up more than 1% after they had one of their busiest days of the holiday season. The railroad sector continues to perform well. Union Pacific traded well all day and closed higher by 1%.

Source: PFS Group

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