Today, I'm going to be looking at nine individual sectors and analyzing each one. I am going show you a quick and easy way to tell which sectors are trending and which ones are stuck in a trading range.
I will also be looking at the top three stocks in each of those sectors that are trending to the upside.
When the Federal Reserve first suggested a gradual tightening of its monetary policy in May 2013, investors began to wonder if the long-running bull market would come to an abrupt end.
A quick spike in interest rates at the time gave a sense that times were indeed changing. Yet investors end up shrugging off that noise: The SP 500 rose an impressive 22% between July 1 of last year and June 30 of this year. Toss in dividends and investors garnered a 25% total return -- roughly the amount investors should expect to garner over a three year period in normal times.
But these are not normal times. The stunning 191% gain for the SP 500 since bottoming out in March 2009 is remarkable in light of the fact that the subsequent economic rebound after the Great Recession has been quite tepid. Low interest rates, a huge amount of global liquidity and very high corporate profit margins all get credit for the bull market that has exceeded the wildest expectations of even the most aggressive market strategists.
At this point, it might seem the wisest path to sit back and enjoy the ride, waiting for another 20% gain over the next 12 months.
Yet before you grow too complacent, you need to take a closer look at factors driving the market higher and assess what kind of backdrop we should expect in the six months ahead. Here are key events and factors you should be tracking.
At this point, there are really only two points of economic interest: unemployment and inflation.
The former is falling and the latter may be rising. We now know that the U.S. economy created at least 200,000 jobs for the fifth straight month. That's the first time that has happened in more than a decade. The next payroll report comes on Aug. 8, and if that report also highlights a gain of at least 200,000 jobs, then it's hard to see how the Fed will stick by its "no rate hikes in the near future" policy. Continue reading "Here's Your Market Roadmap For The Rest Of 2014"→