Utilities (XLU) made a big move off a significant upgrade of NRG Energy (NRG) at Jefferies, with a new target of $113, up from the prior target of $93 (they were behind on the idea).

Financials (XLF) remain the ultimate ‘Trump Sector’ in the S&P 500.

Watching the Consumer

Consumer Discretionary (XLY) is the hottest sector heading into this month's holiday spending season.  Yesterday’s “winners” suggest online experiences and high-end consumers will enjoy the gains:

1. Amazon (AMZN)
2. Booking Holdings (BKNG)
3. Royal Caribbean Cruises (RCL)
4. Ralph Lauren (RL)

This week has seen significant carnage among retailers reporting financials, but most are not components of the S&P 500.

However, the SPDR S&P Retail ETF (XRT) has broken out, reflecting the current feast-or-famine environment among retailers. Note: Walmart (WMT) is the ‘big’ winner - but not the only winner.

Riding Momentum

For all the hand-wringing among Wall Street analysts over large-cap valuations being too high, investors flock there automatically when the market feels toppy. Keeping the party going by riding the waves in a larger, more sturdy boat has been the mindset.

Too Enthusiastic?

I do not think there is such a thing as too much enthusiasm or that owning stocks is “risky.” Still, I know nothing irritates the Street more than retail investors thinking the market is going higher, and never before has retail been this confident about the stock market moving higher.

These environments often mark when stocks are priced for near-term perfection. Minor miscues can lead to big downside moves. If the value proposition remains in place, it is essential to know why you own a stock (missing earnings is not the ultimate way to assess) and either hold or close the position.

I also think ‘the powers that be’ add to the damage to beat the ‘Plebs’ back in line.

Today’s Session

There is a saying that new highs beget new highs. We want to ride that emotional wave, but it’s not the same as a fundamental wave.

From a technical perspective, I would like to see former resistance points tested and held but that might not happen in this environment.

Comments

I am thankful for good health and for the many opportunities I still have in life! Ginger Ruoff on 11/27/2024 2:51:27 PM

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