Despite the more headline-grabbing topics of Cisco and Chinese Internet stocks' declines over the last few sessions, I find it curious that not a lot of folks are concentrating on a more important "tell" for this market and for the economy. Specifically, no one seems to be looking at the economically sensitive sectors and the stocks that comprise them.
Pull up charts on Ford(F:NYSE) or General Motors(GM:NYSE), WalMart(WMT:NYSE), the Transports, Alcoa(AA:NYSE), 3M(MMM:NYSE), Morgan Stanley Cyclical index(CYC), the CRB index(CRB), gold or silver, or junk spreads. All are "harbingers" for the economy at large. All are getting hit pretty hard over the last two weeks. And all are more important to the health of this market going forward than is either Cisco Systems(CSCO:NASD) or Sohu.com(SOHU:NASD).
I know, I know: maybe they are consolidating their big gains from the last year +. Certainly possible, but let's keep a close eye on these issues over the next few weeks. After all, the transports topped exactly 8 months prior to the Dow in 2000. And given that stocks are the single best lead indicator of the future direction of the economy (and not Alan Greenspan as much of the Street would have you believe), it makes sense to keep these issues on the radar screen.
Forget about what Chambers says tonight (you already know the script anyway); watch the economically sensitive stocks.
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e addressed to an individual investor or category of investors to purchase,=
sell or hold any security, or to take any action with respect to the prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at are discussed in articles appearing on the website. Writers of articles =
are required to disclose whether they have a position in any stock or fund =
discussed in an article, but are not permitted to disclose the size or dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess of any kind for a writer's business or fund. Minyanville management=
and staff as well as contributing writers will not respond to emails or ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter