Stock Sector Scout, 2 September 2024
Market Overview
The rise in the major indexes was somewhat subdued this past week, which could be considered the most likely outcome after the huge bounce we had seen in the previous three weeks. I was trying to avoid bringing VIX back to this section, but I have to because I thought it offered the most interesting major index chart:
This is a weekly chart, and yet again it tried to break the major trend it has been following since October 2023 and failed. I don't think we are out of the clear though, because it also didn't establish a lower low here and closed just above the mark from two weeks ago.
From all the reviews on my end of the earnings that have been finishing up, the overall picture looks positive and should support the current cycle continuing higher.
Industry Cycles
The cycle picture looks pretty good so far for a young cycle:
Friday marked a bit of a push where many of the industries managed to put a new cycle high mark in breadth. On Thursday, the cycle highs looked much more scattered, not a welcome sign for a healthy "markets moving in unison" sign:
But it all straightened out on Friday:
The breadth looks pretty good as well:
Last week, I mentioned how "I would expect a bit of a pullback in the coming week or two," and we sort of got some of that, at the very least into the midweek portion.
Industry Highlights
REITs are continuing their hot run. There hasn't been a slowdown in any REIT corner that I have looked at. Soon it is going to be multiple cycles with REITs as one of the industry leaders.
In addition to REITs, Residential Builders have not slowed down:
Also, somewhat new for this section, Tools & Accessories have looked really strong in this cycle:
Here are the tickers that I track in that industry:
ticker, company, sector, industry, country
SWK,"Stanley Black & Decker, Inc.",Industrials,Tools & Accessories,USA
SNA,Snap-on Incorporated,Industrials,Tools & Accessories,USA
LECO,"Lincoln Electric Holdings, Inc.",Industrials,Tools & Accessories,USA
TTC,The Toro Company,Industrials,Tools & Accessories,USA
RBC,RBC Bearings Incorporated,Industrials,Tools & Accessories,USA
TKR,The Timken Company,Industrials,Tools & Accessories,USA
HLMN,Hillman Solutions Corp.,Industrials,Tools & Accessories,USA
Regional Banks were mentioned here recently, and they have remained at the top:
Struggling industries
Department Stores are staying here for multiple weeks now:
At one point Beverages - Brewers looked prime for a breakout and good play but have pulled back and remained down and only of interest to me from the short side:
Closing thoughts
I ended up adding to my long portfolio last week through a few midweek pullbacks. I don't have a good hunch yet if the tiny weakness we saw in the markets in the first half of the week was "the pullback." If that was the case, it was rather weak, and there could be more to come. For my benefit, I would prefer the continuation of the cycle's upward action into the cycle's maturity point, but we don't get what we want with the markets. We have to watch and prepare for moves in either direction.