The broad markets start the day in positive territory as large caps lead and banks lead the upside move. The move comes from positive economic data with the personal income and spending report in line with expectations and the Fed chatter still revolving around a rate hike in September. Banks are rallying around the rumored rate hike possibility while other sectors have struggled in light of the proposed hikes slowing the growth rate even further. Thus, nothing has really changed and the buyers were present to start the week.
All ten sectors of the S&P 500 index ended the day in the green with telecom (IYZ) leading the way up more than 1.2%. Materials (XLB), financials (XLF), and utilities (XLU) were equally positive on the day. Healthcare (XLV) and technology (XLK) showed the smallest improvements on the day. Biotech (IBB) continues to be a drain on the markets near term but it is still holding above the 200 DMA.
Crude oil continued to struggle on the day closing at the $46.96 off 1.4%. The speculation around OPEC remains along with the concern of supply increases coming from Iraq and others around the world. Oil is still holding above support at $46.65 currently. Energy stocks (XLE) were higher on the day and remain near resistance on the upside of the trading range. Patience is needed in both the commodity and the stocks.
Financials (XLF) are being led higher by the banks as it relates to a possible Fed rate hike. We have been down this road before, but many believe this time is different. Let it validate versus speculating as it relates to the reality. Some moves to watch in the sector… WFC broke the top end of the trading range and looking for confirmation and follow through. PFG continuation move higher in the uptrend. EWBC breaks downtrend and moves above the 50 DMA. MET positive three day run and needs to break the downtrend line for the upside to confirm and validate a trend reversal. CFG broke from consolidation range and continues to move higher.
All said and done it was a positive day for the broad markets with investors see opportunity, but moving cautiously. The warnings from the perma-bears continue to be in the headlines along with the eternal optimist. The goal is to find your path and run with it while managing the risk of the markets as they relate to your positions. Stops in place, belief in writing and taking it one day at a time from here.