Stocks are hovering today after climbing for several days
S&P 500 futures are little-changed this morning, while most
European indexes have rebounded from earlier losses and are now up
slightly. Asia was mixed in the overnight session, with Shanghai up
but Tokyo lower. The Japanese yen is gaining across the board and
oil is higher on supply concerns.
Equities have rallied back to barely 1 percent below their previous
all-time high in early August, after several economic reports
showed that the world is now enjoying its strongest growth since
before the 2008 crisis. Investors have been putting money to work
broadly across the market, but our
scanner shows them focusing on cyclical stocks that benefit from an
improving economy. Ocean shipping companies, steel makers, coal
miners, and industrials in particular have outperformed in the last
Companies that benefit from a stronger consumer, such as casino
operators, homebuilders, and snowmobile makers have also stood out.
Today's news may be less impressive, with Eurozone industrial
production shrinking rather than growing as expected in July.
Japanese machine orders and Australian employment also lagged
forecasts. Attention now focuses on initial jobless claims in the
United States at 8:30 a.m. ET, followed by the more-important
retail sales and consumer sentiment tomorrow morning.
Investors are also concerned about how much the Federal Reserve
will slow its program of bond buying and are focused on next
Wednesday's monetary-policy announcement. Despite the worries, a
10-year Treasury bond auction went better than expected yesterday.
A 30-year auction today could also provide clues about the future
of interest rates.
The strong yen, triggered by Japan's weak machine orders, is
casting a bearish shadow across foreign-exchange markets. The
Australian dollar, which also follows sentiment toward the global
economy, is down almost a full percentage point while the euro is
edging lower. Copper, another bellwether for global growth, dropped
more than 1 percent. Gold and silver shed about 2 percent, and
agricultural foodstuffs are mostly negative.
Crude oil is the only major commodity trading higher, lifted almost
1 percent by a report that oil production will lag demand within
nations in the Organization of Petroleum Exporting Countries
In company-specific news, Lululemon Athletica and Vera Bradley are
down 8 percent and 9 percent respectively on weak guidance. Coal
miners could also be active after the Obama administration issued
stringent emission rules for new power plants.
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