Stocks are higher again today as buyers return to the strongest
bull market in a generation.
S&P 500 futures have been climbing in the last hour and are now
up almost 0.25 percent. Europe is trading similarly, and Asia was
mostly higher in the overnight session. Commodities, currencies,
and bonds are also trading benignly.
The S&P 500 closed at an all-time high of 1733 yesterday,
slightly above its record from a month earlier, as politicians in
Washington ended a government shutdown and reached an agreement to
raise the country's debt ceiling. That let investors return to a
market that remains underowned and is hampered by few major
Almost every sector has benefited from the strength, but our
market scanner shows certain groups have emerging recently.
Financial guarantors, highly leveraged to asset quality, have
outperformed as loan delinquencies fall. Banks in once-distressed
European countries like Spain and Greece have been strong as those
countries recover. Oil refiners have benefited from a widening of
the spread between Brent and West Texas Intermediate crude oils.
Owners of wireless towers have also been gaining following a long
period of underperformance.
Metals, solar energy, and airlines have also continued longer-term
uptrends. There also seems to be a shift underway toward
The environment is increasingly favorable for stocks, with the
economy growing fast enough to support profits, but not fast enough
to warrant higher interest rates. China, for instance, said last
night that third-quarter economic growth accelerated to 7.8
percent, but industrial production slowed to 10.2 percent in
September. Both matched forecasts, while retail sales unexpectedly
Bond yields are also set to decline again in the United States
following a sharp drop yesterday. If that trend continues, it will
likely benefit housing, real-estate investment trusts, utilities
The most recent earnings reports have also been positive. Google is
poised to open 10 percent higher after the Internet giant's
quarterly results blew past expectations. Morgan Stanley is up more
than 2 percent after its profit and revenue beat forecasts. General
Electric also rose after a shift to oil-and-gas equipment fueled a
record backlog of industrial orders. Schlumberger is also climbing
as the global energy boom drove results.
Oil is up about 1 percent, copper rose almost half a percent, and
agricultural products are mostly higher. U.S. dollar weakness is
the main theme in currency markets, with euro, Australian dollar,
and Japanese yen all up slightly against the greenback.
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