The market continues to be less influenced by any major macro call. The macro environment is far calmer than in the final weeks of 2012. Stock correlations are falling as the macro fades and individual companies are reporting earnings. There hasn’t been much reaction to the news associated with the debt ceiling today. Any news on the matter is coming in according to expectations. The Dow traded 0.49% higher, largely influenced by IBM, and the S&P 500 was 0.15% higher.
Software, homebuilders and rails are reacting favorably to earnings announcements. Investors liked what they heard from Google when they reported earnings after the close yesterday. Concerns over the shift from desktop to mobile search were eased. IBM also reported stronger than expected numbers in both hardware and software sales.
Homebuilders rallied today after KB Homes reported earnings. KBH released better than expected earnings and announced strong orders growth. The FHFA house price index continued to trend higher in November. The index increased 0.6% during the month. Increased demand for housing and limited inventory has had a positive impact on pricing.
The rails continue to surge. The Transports rocketed to a new all-time high this morning. CSX and Norfolk Southern reported earnings in excess of expectations. Union Pacific hit a new multi-year high in response to the earnings releases. Union Pacific has not traded this high since 1969.
Materials traded lower on weakness in metals and chemicals. Steel stocks traded lower after moving higher on price hikes yesterday. Precious metal stocks traded lower in the 1% range after moving higher in recent sessions.
Commodities were mostly lower, with gold, crude, natural gas and grains trading lower. Gold traded off by 0.37% and silver traded ahead of the tape.
Healthcare underperformed the broader market with biotechs and pharmaceutical stocks lagging. Medical technology stocks were the best performers in the sector.
The consumer sector underperformed the broader market. The retail space traded lower. Coach sold off sharply after they announced weaker than expected earnings.
Source: PFS Group
