Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Industrial Stocks Will Drive the Stock Market Higher, Regardless of High Oil Prices

Stock-Markets / Stock Markets 2011 Mar 10, 2011 - 06:38 AM GMT

By: Money_Morning

Stock-Markets

Best Financial Markets Analysis ArticleJon D. Markman writes: Some investors are worried that high oil prices will drag down the U.S. recovery - and the stock market rally it's spawned.

But even though some stocks look to be topping out, the major industrial stocks behind this bull market are plowing ahead.


Don't get me wrong - some real heavyweights look poised to hit the mat. InternationalBusiness MachinesCorp. (NYSE: IBM) looks like it could be settling in for a prolonged sideways shuffle after reaching new all-time highs in January.Amazon.com Inc. (Nasdaq: AMZN) looks like it has put its finger on the wrong page.And Google Inc. (Nasdaq: GOOG) looks like the two letters in the middle of its name - big zeroes.

But these companies are not what the recent advance has been about. The advance that began in March 2009 has been about the industrials. It's about the manufacturers - the companies with factories that you can see in your mind's eye with smokestacks puffing away like black-and-white pictures in an old book.

This move has been aboutHoneywell International Inc. (NYSE: HON). It's been about E.I. du Du Pont de Nemours & Co. (NYSE: DD). And it's been about Exxon Mobil Corp. (NYSE: XOM) and Pfizer Inc. (NYSE: PFE).

These are the big guys, but the smaller companies are on board, as well. I'm talking about firms like Gardner Denver Inc. (NYSE: GDI), which makes compressors, blowers, pumps and loading arms, and Roper IndustriesInc. (NYSE: ROP), which makes wastewater pumps and industrial imagers and portable grinding machines.

These are the companies driving the stock market bull. And they will continue to do so.

The data is crystal clear on this subject: Gains in orders, inventories, employment, and exports collectively are sending a strong signal that factories will continue to propel the expansion.

Consider the following:

•The U.S. Department of Commerce said yesterday (Wednesday) that inventories at U.S. wholesalers rose more than forecast in January as distributors tried to keep pace with sales that rose by the most since November 2009. The 1.1% increase in stockpiles followed a revised 1.3% gain in December. Sales jumped 3.4% in January, led by cars, computers and commodities.
•Car sales were particularly impressive, as sales rose 6.4% to a 13.4 million unit annual rate in February,according to data provided by Ned Davis Research (NDR). That's the most since the cash-for-clunkers program in August 2009.
•The latest Institute for Supply Management data shows that U.S. manufacturing in February grew at the fastest pace in almost seven years.
•The U.S. unemployment rate unexpectedly dropped to a nearly two-year low of 8.9% in February, according to the latest report from to the U.S. Department of Labor. And the number of Americans filing first-time claims for unemployment benefits for the week ended Feb. 26 fell to a nearly three-year low.

The point is that the industrial companies at the center of this market advance don't appear to me to be making tops. They're hiring and stocking up on inventories as retailers continue to move merchandise - $100 a barrel oil notwithstanding.

That's right. Don't believe for a second that the stock market bulls are going to throw in the towel just because of some renewed Mideast turmoil and slightly higher crude oil prices. Investors are jumping at their own shadows lately, creating sharp sell-offs that are later quickly surmounted.

Although oil seems high, absolute price levels are never really the problem. Remember that from 2003 to 2007, crude rose from $30 per barrel to $75 per barrel and there was a bull market in stocks all the way. Oil prices only become a problem when they are extremely volatile, preventing companies from being able to plan adequately and to pass along higher costs to customers.

That hasn't been the case this time around. The summer of 2008 - when oil prices reached a record high $147 a barrel - taught companies a valuable lesson, and now they're better prepared.

So stick with the current plan: Lean on the manufacturers that have carried the market higher. Stay positive and wait for the storms to pass.

[Editor's Note: Money Morning Contributing Writer Jon D. Markman has a unique view of both the world economy and the global financial markets. With uncertainty the watchword and volatility the norm in today's markets, low-risk/high-profit investments will be tougher than ever to find.

It will take a seasoned guide to uncover those opportunities.

Markman is that guide.

In the face of what's been the toughest market for investors since the Great Depression, it's time to sweep away the uncertainty and eradicate the worry. That's why investors subscribe to Markman's Strategic Advantage newsletter every week: He can see opportunity when other investors are blinded by worry.

Subscribe to Strategic Advantage and hire Markman to be your guide. For more information, please click here.]

Source : http://moneymorning.com/2011/03/10/...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

christian
11 Mar 11, 19:33
LOL it's the pomo's

The bulls in this rally are the primary dealers......POMO's (QE) are driving it up. When the 10 year treasury rises like a tsunami the end is near. that's when you can use pomo's to bid up the price of CDS in europe and lead to a euro debt crisis in order to get money flowing back to the ten year treasury. wall street are the masters of the universe for now. When the rest of the world slows down (IF) and becomes over-indebted that house of cards falls....until then enjoy commodity inflation that is ignored by the fed that has no plan but to QE. pulling the plug on qE will lead to disaster....that is one reason why the fed has been so reckless lately... so we are slow cooked to death. and the fed has to maintain that they have a dual manadate and that is why they are QE'ing to infinity.....it's a CONfidence game baby!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules