Rebuilding With Bricks And Mortar

On Monday, there were still moments when the market hit small air pockets. Overall, the session was a major success, considering the recent bouts of significant swoons and excessive volatility.

S&P 500 Index

+1.27%

Communication Services XLC

+0.38%

Consumer Discretionary XLY

+1.06%

Consumer Staples XLP

+0.65%

Energy XLE

+0.77%

Financials XLF

+1.38%

Health Care XLV

+1.43%

Industrials XLI

+1.35%

Materials XLB

+1.44%

Real Estate XLRE

+2.45%

Technology XLK

+2.10%

Utilities XLU

+1.37%

I continue to marvel at the action in brick-and-mortar retailers that have been crushed year-to-date. Over the past week, they have been coming on like gangbusters. I think if this continues, they could pick up more steam with more stimulus and a vaccine.

Brick & Mortar 

Stock Performance

5 day

YTD

Capri (CPRI)

+24%

-44%

Tapestry, Inc (TPR)

+20%

-35%

PVH., formerly known as the Phillips-Van Heusen Corp (PVH)

+13%

-32

New York Skyline Keeps Growing

All eleven sectors in the S&P 500 finished higher, led by Real Estate and Technology. I am not sure why the Real Estate sector performed so well and found the mix of leadership intriguing. Many of the names at the top of the gainers’ list are not dividend payers.

The most intriguing company was SL Green Realty (SLG), the largest owner of NYC office real estate. The company unveiled its newest building One Vanderbilt, located across the street from Grand Central Station. The $3.1 billion commercial office building is 1,401 feet tall and contains 1.7 million square feet of space. 

The stock is yielding a hefty 7.91%. There is a mass exodus out of NYC, so why did the stock rally 6.3% on ‘better than average’ volume?  I have to believe the market is looking past the coronavirus and the current mayor for a return to glory. With buildings like One Vanderbilt, it could happen – but why bet on it now?

Intriguing Action

You Can Check Out Anytime You Like:

Hotel Stocks were higher yesterday as part of the now typical knee-jerk reaction to positive news on the race for a Covid-19 vaccine. Interestingly, hotel names traded better than cruise ships and airlines.

  • Hilton (HLT): +5.65%
  • Marriott (MAR): +5.46%
  • Hyatt (H): +7.26%
  • Wyndham (WH): +4.18%
  • Intercontinental (IHG): +2.35%

Riding the Rails

Transportation names were hot all session long with Delta Air Lines (DAL) setting the pace. But it was the rail operators that were most impressive.

Record highs:

  • Norfolk Southern (NSC)
  • Union Pacific (UNP)
  • Canadian Pacific (CP)

After the close, FedEx (FDX) announced it will be hiking its rates by 4.9% across several services. The news lifted the share price in after-hours trading.

Market Breadth

Breadth was very impressive with a 4 to 1 advance-decline ratio (ADR) on the NYSE: 3.6 to 1 on the NASDAQ.

NYSE

  • 2,428 advancers against 591 decliners
  • 3.24 billion up volume against 622 million down volume

NASDAQ

  • 2,693 advancers against 743 decliners
  • 3.19 billion up volume against 537 million down volume

Portfolio Approach

We took one big gain and one small loss in the Hotline Model Portfolio, in part to maintain cash to take advantage of continued volatility and opportunities.  This morning, we are adding an new position to Technology. If you are not a current subscriber to the Hotline, get started today.  Call your account representative or email Info@wstreet.com.

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Today’s Session

The future are set for another positive open and all the major indices are in the green. 

This morning, the NY Fed’s September Manufacturing Index came in at 17 beating the estimates of 6.9 and a huge increase from 3.7 in August.

Empire State Manufacturing Survey

Aug

Sep

General Business

+3.7

+17.0

New Orders

-1.7

+7.1

Shipments

+6.7

+14.1