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“Remember that stocks are never too high for you to begin buying or too low to begin selling.” – Jesse Livermore
It’s looking like a mixed start to the week and a bit of a reversal of Friday’s trade as the Nasdaq lags while the S&P 500 and Dow futures are both higher. Commodities are flying again this morning as copper is on pace for its third straight 2%+ daily gain and Energy commodities trade higher on the news of the Colonial Pipeline outage over the weekend.
The economic calendar is empty today, but with the moves we’ve already seen in commodities plus updates on CPI and PPI later in the week, inflation will be a major theme of the week.
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of overnight earnings reports and economic data, updates on the major moves in commodities, as well as the latest US and international COVID trends including our vaccination trackers (which continue to show a significant deceleration in vaccine uptake), and much more.
Based on the first week’s performance, May started off with another run for cyclical stocks. In a week where seven of eleven sectors finished in the green, the biggest winners were Energy, Materials, Financials, and Industrials, which were all up over 3%. All four sectors are also leading on a YTD basis and the most extended relative to their 50-DMAs. With the rallies, though, also comes overbought levels, and in the case of Financials, Materials, and Energy, they all closed out last week at ‘extreme’ overbought levels.
So, who’s lagging? Utilities, Real Estate, Consumer Discretionary, and Technology were the only four sectors down last week, and besides Real Estate, they are also the only sectors that aren’t currently overbought.