The market just couldn’t gain any traction after fending off early weakness. The major indices simply couldn’t get it into gear, but there was intriguing action in the session on Tuesday.

‘Tis the Season…

Retailers that were written off earlier this year continue to stage remarkable rebounds, suggesting that brick-and-mortar retail has survived the Amazon onslaught. It might be too early to say old retail is out of the woods, but with 20 bankruptcies this year, it has thinned out the herd.

Yesterday’s big winners:

• (KSS) Kohl’s
• (M) Macy’s
• (FL) Foot Locker

While it’s true the S&P Consumer Discretionary sector and many ETFs such as the VanEck Vectors Retail ETF (RTH) are being propelled by Amazon (AMZN), the rest of the holdings are key brick-and-mortar names:  

• (WMT) Walmart
• (COST) Costco
• (LOW) Lowes
• (HD) Home Depot

The RTH has been on fire since breaking out ahead of the passage of the tax bill - up more than 21% for 2017. As more and more data is confirmed, consumer optimism is evolving into consumer spending.

With the increasing talk of infrastructure, material names continue to strengthen, including Freeport- McMorRan (FCX) and U.S. Steel (X).

Crude Oil Big Winner

Crude oil has been on a wild ride that saw its price collapse when Saudi Arabia declared war on America’s fracking miracle.  It wasn’t long ago when oil mavens were talking about a “two-handle” for crude, which means trading in the twenty price area.  Fast forward and West Texas Intermediate (WTI) is on the cusp of trading with a six-handle after closing +1.50 to its highest level since June 2015.

Several runs toward $60.00 have been thwarted this year, but the real breakout comes with a close north of $62.00. I continue to say you must have exposure. You play it safe with a big name with a fat dividend like Chevron (CVX) or a smaller name with great exposure, including the Permian and Eagle Ford basins. 

Speaking of oil and Texas; yesterday, the Dallas Fed released its December manufacturing data.  The report saw strong components from all segments, many growing at levels not seen in a dozen years.

• Production: +17.7 points to 32.8
• New Orders: +10.1 points to 30.1
• Shipments: +4.8 points to 21.5
• Capacity utilization: +9.0 points to 26.3
• Employment: +14.1 points to 20.4
• Hours worked: +6.0 points to 23.3

Today’s Session

Equity futures have been sliding all morning without any catalyst in this short holiday week, which has the market drifting. Consumer confidence and pending home sale are out later that could provide some direction to the market.