In a photo finish the S&P 500 (SPX) declined for the first time on a Monday since early April. The day’s decline was a paltry 0.01%, nothing worth pulling one’s hair out over. Yesterday’s market action was typical of the recent strength of the equity markets which is characterized by shallow pullbacks and streaky advances of moderation.
Buffalo Wild Wings Surges
One of our top picks in both the Equity Growth and Restaurant & Food Chain portfolios, Buffalo Wild Wings (BWLD) surged nearly 6%, just over 9 points. Contributing to that gain was both a Investors’ Business Daily (IBD) story on the stock and a strong showing at branded restaurants due to the ongoing World Cup. IBD is like the Daily Racing Form for momentum traders. We could see Buffalo Wild Wings turn into the next Chipotle Mexican Grill (CMG) and begin to gather some steam to the upside. As it is a large position, I will sell part of our positions into any mo-mo (that’s the term for momentum traders) related lift.
Housing Data ibnFocus Today
The earnings calendar has a few noteworthy companies reporting: Hertz (HTZ), Carnival Cruise Lines (CCL) and Walgreen (WAG). The economic calendar is more interesting with housing data and consumer confidence expected to be disseminated. Housing data in the form of the Case-Shiller Index will first be reported at 9AM. Then at 10AM, consumer confidence and new home sales will be released. Yesterday, existing home sales were reported to be better than expected. I can tell you this much, my wife who is a real estate attorney in New Jersey, and specializes in residential closings and landlord-tenant litigation, is busier now than she was during the last residential real estate boom.
I have this sneaking suspicion that the markets will rally up through the Independence Day holiday and then back off for a few weeks. The retreat will be shallow and create opportunities. Hence, before the Fourth of July fireworks are launched, I plan on raising some cash.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long BWLD — although positions can change at any time.
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