Energy stocks power summer rebound
After months in the doldrums, equities are perking up for the first time since May.
We're off to the races again. Yes, there are still risks on the horizon. The upcoming second quarter earnings seasons could be a dud. Egypt could blow up. The Federal Reserve could keep talking up the dreaded "taper" of rolling back its cheap money stimulus. Meanwhile, the economic data remain relatively weak, with manufacturing activity slowing and job gains concentrated on low-wage, no-benefit part-time positions.
But for the first time in months, investors are looking past all this and are buying stocks hand over fist, particularly energy stocks. As a result, the Dow Jones Industrial Average ($INDU) is breaking out of a multi-month downtrend pattern, while small cap stocks are already pushing to new record highs. Signs abound that the strength will continue. Here are the highlights.
The chart above shows how the Morgan Stanley Cyclical Index (CYC), which is tied to the performance of economically-sensitive stocks like Ford (F) and Caterpillar (CAT), is rounding into an uptrend pattern for the first time since early May. Where cyclicals go, the rest of the market tends to follow.
There's more. Investor sentiment is recovering from a bout of pessimism. Market breadth is recovering from lows not seen since November. And buying pressure from the late June market bottom has been steady and broad: Since June 24, we haven't seen a down day with more than 700 net declining issues on the NYSE.
Currently, after the recent surge in crude oil towards $104 a barrel, energy stocks are leading the way higher. You can see this in the breakout underway in the Energy Sector SPDR (XLE), shown above. My favorites in the space are National Oilwell Varco (NOV) and Schlumberger (SLB). I'm adding both to my Edge Letter Sample Portfolio.
Disclosure: Anthony has recommended NOV to his clients.
Check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at firstname.lastname@example.org and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.
MSN Money on Twitter and Facebook
. Congress no longer represents the American people. To be elected to congress cost large amounts of money and vested interests supply this money, congressman are bought and paid for before they ever take office. Also, it is estimated that for every $1 spent by lobbyists there is a $2200 return on that dollar. The money is just too big. If you look at who benefits from our current economic policy it is the big banks, large corporations and the federal government and the vested interests they protect. Americans we are going to have to face this reality and deal with it. Sorry about that!! The big question is do we have what it takes to deal with this reality????
Market (DOW) up about 90...
Most of our Energy stocks were up about 1.5-2.0%..
Yeah, we likey very much.
Ahhh, the Sweet smell of recovery....Why not jack the shidt out of energy costs..??
Yeah, why not..
It`s all about earnings.That`s the real reason the market is up 90% with Obama.The
Obama haters love to dream up other reasons.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
It's time for a reality check in advance of the Chinese e-commerce giant's much anticipated initial public offering.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.