Our contributors remain bullish, but cautious. This month’s Spotlight Stock is a Master Limited Partnership that’s primarily an asset manager, and its holdings are increasingly energy investments. The company is growing at double-digit rates and currently yields 5.35%.
Wall Street’s Best Dividend Stocks 302
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Market Views
Still Positive
In the final analysis, while there are definitely a couple of cracks in the stock market’s wall of worry that bear watching in the coming weeks, the weight of technical and fundamental evidence remains positive.
When the bull market has lost its health and vigor, the market itself will provide us with the clues. Until it does, traders should continue to lean bullish and avoid the temptation to time the stock market’s next major top.
Cliff Droke, Momentum Strategies Report, www.cliffdroke.com, 707-282-5594, November 6, 2017
Short- and Medium-Term Bullish
NASDAQ 100 closed last week +1.3% making new price and relative highs. Information Technology +0.9% makes new price and relative highs; Metals & Mining -0.8% tests relative lows. Our outlook remains moderately short-term bullish and medium-term bullish, but monitor potential corrections.
John Gray, Investors Intelligence, www.investorsintelligence.com, 914-632-0422, November 6, 2017
Market Breadth Thins
Bespoke Investment Group analysts report that the S&P 500 needs just six more calendar days to cross the 500-day mark without a 5% pullback, and just seven days to break a record for the longest streak ever without a 3% pullback.
While markets made new highs this week, the action outside of energy and tech was uninspiring. Might just be a pause, but the thinning of market breadth could turn out to be a bad omen. The number of stocks trading over their 50-day moving average fell to 66%, which is relatively weak for a bull cycle.
Weakest sectors for breadth are consumer staples, consumer discretionary and telecom. Health care and industrials are also weakening. It’s weird to see consumer-oriented sectors on the ropes when surveys show consumer confidence is strong and unemployment is near record lows.
After its powerful move this month, technology stocks now account for 24.5% of the market cap of the S&P 500, which is 10 percentage points more than the next sector, financials. Bespoke analysts report that tech’s weighting is nine percentage points above its long-term average. Health care is the only other sector whose weight is above its long-term average. This is a yellow flag for bulls, as market cap weighting in the benchmark index regresses to the mean over time. Based on this analysis alone, we should see a least some swing back into favor for energy, telecom and consumer staples in the next few months.
Jon Markman, Strategic Advantage, www.markmancapital.net, November 6, 2017
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The Next Wall Street’s Best Dividend Stocks Will Be Published December 13, 2017
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