Classic growth anyone?
That's what it feels like when I see PepsiCo (PEP) up $1.66, Priceline.com (PCLN) up $17, Pharmacyclics (PCYC) up $21 and Johnson & Johnson's (JNJ) stock going up $2 (partner of Pharmacyclics).
Nice to see Chipotle (CMG) up $5, LinkedIn (LNKD) up $2 despite a downgrade and Zillow (Z) rallying another $2.
These stocks had become the anchor to this market, the millstone, glaringly obvious as "wrong" given the selloff in bonds. This move, so pronounced, is saying two things to me:
- These stocks, which usually can't be kept back for that long, are advancing as we approach earnings because they will have good ones.
- Interest rates might be done with their run up, even if the employment number is strong.
To me, a strong number is baked into the 3% on the 10-year and you won't see a race to 3.25% That could also be why the bank stocks have stalled. They need rates at 3.25% pretty soon because they are anticipating an even bigger net interest margin than we have right now.
Watch these stocks. It's a sign of health that money's going back into them. There are too many of them out there for the market to rally much further without them.