As I expected, it was, on the surface a quiet trading session. Scant early losses turned into gains across all major indexes, with both the Dow Jones Industrials (DJIA) and Standard & Poor’s 500 (SPX) making new all-time highs.
Below the surface, there were some interesting trends worth noting. The Russell 2000 (RUT) Index was the leader posting a 1.09% advance. Biotech stocks had a strong bid across the board. Retailers posted some snap back gains, but that was put to an end after hours when Urban Outfitters (URBN) declined over 16% in response to its most recent quarterly earnings report. URBN took other retailers down after hours, erasing some of the day’s gains.
Home Depot (HD), TJX (TJX) and Wal*Mart (WMT) all highlight today’s earnings calendar. I am starting to put together a shopping list of retailers and financials that I would buy on further pullbacks. Leading those lists right now are Kohl’s (KSS) and Well Fargo (WFC), but I am far away from making any decision, and other candidates may emerge.
As we are nearly fully invested in our Growth Strategy portfolios, I will have to find a source of cash to buy any retailer or financial services company. My inclination is to trim a little bit of a few winners, but again, I am far away from making any decision.
With several indexes at new highs, I am beginning to form the opinion, a gut feeling, that we are poised for another significant move higher into unchartered territory. With that in mind, don’t be surprised if the SPX rises to 2,200 and the DJIA rises to 19,000 by the end of the quarter.
As for today, once again retail will steal the headlines, but those risk takers will be back buying biotechs, technology, small cap and other risk-on assets and sectors. If you want to put some discretionary funds to work in biotech, take a look at the ALPS Medical Breakthroughs ETF (SBIO), combining both elements of biotech and small cap sectors.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long SBIO — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website.
LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
– Read Scott’s intra-day thoughts and comments on Scutify for which he is a co-founder of its parent company Wall Street All-Stars, LLC
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