Remember what the bulls need to see: a broadening out of the winners, an advance that encompasses not only a handful of semiconductor stocks, some internet darlings and Tesla (TSLA) . The notion of the narrow market is one that is antithetical to a sustained upside move. A market without breadth is a market not to be trusted.
This market, today, is earning some trust.
First, the other day I cited the miserable performance of the transports signaling them out as a bellwether of weakness and a worrisome sign of a market running on fumes.
Today the call was answered. First, Federal Express (FDX) and United Parcel (UPS) , stalled so badly of late, came out of the blocks hot. Now we heard a lot of activist chatter when it came to the long-faltering UPS. But either way, the dramatic move in Federal Express made me feel don't give up on commerce just yet. The other rails, Union Pacific (UNP) and Norfolk Southern (NS) , joined the endless winner that is CSX (CSX) . Even the miserable truckers and freight forwarders had a good day. That's a terrific way to break the stalemate about whether the transports are signaling advance or retreat.
We've been bemoaning the lack of support for retailers all during this narrowing move. Suddenly, though, there's something to talk about. Dollar General (DG) , which had languished for so long near its 52-week-low after being such a darling for ages, reported a sharply better than expected quarter and it's been on fire all day, rallying 5%. It's taking up its brethren Dollar Tree (DLTR) even as that company reported a subpar quarter, a sign of total forgiveness.
Remember when Home Depot (HD) gave you that terrific quarter only to see its stock fall a quick five bucks. Well, that decline now seems to have run its course and it's carrying up Lowe's (LOW) . I would be a buyer of Home Depot. In fact I could argue it should never have been down.
Kohl's (KSS) stock, one of the most undervalued department stores, lit it up today, jumping a buck. I simply don't think this company deserves to be in the bargain bin. It's just not doing that badly and that 5.5% yield is very enticing.
Oh and it's always good to see a real bargain go higher, Ollie's Bargain Outlet (OLLI) , which hit an all-time high on some fantastic numbers and encouragement that the company's got a gigantic runway for growth aided by the collapse of so many also ran bricks and mortar stores as well as better rent rates and the continuing advance of Ollie's army.
We know there's been a host of tech names that have been generating some excellent stock performance. But many of those, particularly the highest growth stocks, are stepping aside and letting others participate.
One of my favorite unsung growth companies, Box (BOX) , run by the redoubtable Aaron Levie, put up still one more strong number, with a promised positive cash flow, and the stock vaulted ten percent. That's deserving for this cloud content management platform, although that rubric really sells the company short. Still, I like the delicious irony of the short selling analogy because there have been bears circling this stock from the day it came public and I can safely say I think they have been routed by the 30% growth that Levie delivered.'
You may not recall, but a company called Tech Data (TECD) appeared on Mad Money a quarter ago with a number that some thought was a dud. I pushed it hard because the global supermarket of tech had just completed the acquisition of an underachieving portion of rival Avnet's business. The company promised you'd see big growth this quarter and that's exactly what you saw this morning, and the market lapped it up, with the stock rocketing almost 4%. Thank you, Bob, Dutkowsky, for delivering everything you did, and more so.
I duly noted the remarkable ramp in Ciena (CIEN) today, a networking equipment stock that signaled a huge spending cycle, especially in Asia, is now in front of us. How joyous and what a break from the endless leadership of the high flying Nvidia (NVDA) , which at last saw its stock do nothing.
Boy its wings must be tired. Nice to see others take up the slack in the sector including Palo Alto PANW which had been a simply dismal performer for ages. Not today, it took off more than 15% on a return to form quarter with some excellent growth. All is forgiven after some real time spent in the penalty box for some hiccup quarters for this once cyber-security darling.
Many have given up on the food group and I can't blame you given the meager growth. But sometimes self-help is a beautiful thing and the rumored acquisition of Pinnacle Foods (PF) by Conagra (CAG) sent both stocks screaming. Talk about a positive sign for a group at death's door. I like that.
Speaking of self-help, I have marveled at the stock of John Deere (DE) , after reporting a fantastic quarter. But after leaping from $112 to $120 in the wake of that fabulous news, it had stalled for seven days causing concern that the whole move may be unsustainable. Then today it spends $5.3 billion to buy a German company roadbuilding construction company, Wirtgen, and it's off to the races again. Why not? In one fell swoop this acquisition takes Deere from 21% construction to 30% in an accretive fashion. That makes the company no longer as hostage as it has been to the agricultural cycle. Plenty of people have been postulating that the construction stocks had cooled. But this deal ignited Cummins (CMI) and Caterpillar (CAT) , the two big bellwethers. Illinois Tool Works (ITW) jumped a couple of bucks, too, although I would attribute that advance to the capitulation of an ill-advised bear at Goldman Sachs (GS) who did a huge about face and went from sell to buy on the stock citing management's incredible acumen, among other things, for the double upgrade. Note to Goldman, Scott Santi's, been among the great managers of our era. Perhaps they should spend some time with that visionary CEO and really get to know the story.
It's also a pleasure to see the stock of Danaher (DHR) put on some points. It's been suffering under the weight of one underperforming dental division. But there's a lot more to this splendid company that one ne'er-do-well performing business line as we have been telling members of the actionalertsplus.com club and finally the market seems to be agreeing.
The move in the casino stocks in the last few weeks had seemed tentative and halting. Not today as Wynn (WYNN) , Las Vegas Sands (LVS) and MGM (MGM) screamed higher on the release of the best numbers out of Macau in three years. Now that the Peoples Republic of China is starting to bless high rolling again I guess it was just a matter of time before these stocks returned to form. I like them all, but you know I like Steve Wynn's wealthy gaming mecca and think that MGM's got a lower-risk nice reward thing going with some excellent numbers in Las Vegas.
Remember when biotech stocks used to go higher? Did you see Celgene (CELG) today? It got unstuck ramping two bucks to the upside. Regeneron (REGN) tacked on six and Biogen (BIIB) ran four. Nice to see those respond to the market's wake up call.
Oh and I know it is only one day. But it did take my breath away to see Wells Fargo's (WFC) stock up a dollar at one point. The big national banks that do a ton of trading had been weak because of a lack of volatility of late that's needed to generate trading revenues. Wells Fargo's been the lone large bank that never relied on that revenue stream. Perhaps that's how it could pop today even as CEO Tim Sloan said that loan growth's not as robust as it was not that long ago.
My suggestion if you own it, as my charitable trust does? It takes 18 months for the American republic to truly forgive or forget. Don't get too excited there's a about a year more in purgatory. But patient people can take that dividend and reinvest while you wait. Still, it is nice to see that stock can go up not just down.
So, the rap against this market was that it was all FANG all of the time with a smattering of cloud winners and Tesla. Today the rally got broader, much broader, and it took with it some serious objections to the any further advances.
