EmailThe stock market delivered an encore performance on Tuesday, advancing smartly on low volume. Once again, the transports outperformed, the small and mid-cap stocks outpaced their larger counterparts, cyclical sectors assumed a leadership position, and Treasuries were weak.
For good measure, the Dow Jones Industrial Average closed above 15,000 for the first time ever and the S&P 500 once again notched another record closing high of its own.
Once again, anyone waiting for a correction was left waiting at the train station.
Foreign markets have moved up once again, with most major indices registering modest gains on the back of China's stronger-than-expected trade report (the legitimacy of which some are questioning) and Germany's stronger-than-expected industrial production report.
China said its exports surged 14.7% in April while imports jumped 16.8%. The export number certainly is attention grabbing considering the eurozone is in recession and US growth is subpar.
The headline figures could once again keep a bid in the basic materials sector, which has been one of the better-performing sectors over the past month. Already, we are seeing industrial metals trade higher, with copper (+2.5%) among the standouts once again. Including today's early gain, copper prices are up 10.0% since May 1.
In corporate news, Walt Disney (DIS) once again topped its consensus earnings estimate, this time beating analysts' earnings expectations by two cents per share, according to Capital IQ. McDonald's (MCD), meanwhile, reported a 0.6% decline in global comparable sales for April, with weakness in its Europe and APMEA segments offset in part by a 0.7% increase in US comparable sales.
The economic calendar is once again on the light side, featuring only the weekly MBA Mortgage Index report. The latter once again showed an increase in mortgage applications, with a gain of 7.0% versus a 1.8% gain in the prior week.
Once again, the futures market is taking in all of the news without a lot of fanfare. The S&P futures are down two points and are trading about 0.2% below fair value, most likely on a presumption that the market is due for some profit taking after a 5.5% increase over the last two-and-half weeks.
Don't be surprised, though, if there is an inclination once again to buy on the dip.
--Patrick J. O'Hare, Briefing.com
