The Quant View: Pausing for a Breath...Or Running Out of Gas? By David Brown | June 09, 2009
Was Monday's market action a pause to catch a breath, or is it
running out of gas? Pundits are on both sides of the fence, but in my
view the trend is still up until proven otherwise.
A steady dose of positive economic data fueled yet another positive
week on Wall Street, led by the surging Small-cap Growth stocks, up
5.9%. The worst performance came from Large-cap Value stocks, which
were still up 1.5%.
The chief economic concern has been unemployment, so the most
welcome news of the week was the labor statistics published on Friday.
Yet somewhat surprisingly, Friday ended slightly down for the day, and
that slight negative feeling has carried over into Monday, though to be
sure, the saber rattling of North Korea doesn't help matters.
Still, one cannot help but wonder whether the current rally is
losing steam, or perhaps has completely run out of gas, although I
believe the latter is unlikely. If you'll look at the Style/Cap table
below, you can see that Small-caps performance is now at approximately
50% over the past three months, with Large-cap and Mid-cap stocks in
the high 30% and 40%.
From a sector viewpoint, Industrials led the way, up 5.6% for the
week, followed by Technology and Consumer Discretionary. The latter was
triggered by fairly positive housing data reports on several occasions
throughout the week. Telecom, Financials and Health Care were at the
bottom of the sector rankings, but still positive for the week.
From an industry viewpoint, Auto Components was the leader, spurred
on by optimism generated by the agreement with the bondholders that
resulted in a view that a leaner, meaner GM will emerge from
bankruptcy, which was announced last week. Hence, the Auto Components
industry was up 9.6%. Machinery, Internet Retail, Airlines and
Aerospace & Defense were close behind, while Commercial Banks and
Marine companies brought up the rear.
Continued at:
The Quant View: Pausing for a Breath...Or Running Out of Gas? By David Brown | June 09, 2009
www.sabrient.com/smart/qmaxx