Friday, March 5, 2010

$X $MEE $DAL Homebuilders/Industrials/Materials/Energy- Industrials/Materials/Energy Outliers


·         Industrials: Industrials outperformed the tape today, continuing to move higher following the jobs report this morning. Really nothing out of the ordinary as investors put money almost equally into all areas within the space. Multis and machinery both outperformed as investors put more money to work in the space. It seems that most of this move has initially been financed by short covering as institutions remain absent.   Many warn to let the momentum take it course until we get into the later hours. Aero/def names were mostly ahead of the tape. E&Cs are outperforming the lower beta waste names today, which is in line or slightly below the tape. Education names are also outperforming on the PT increase for CECO this morning. Business services are up 2-5% today on the heels of the positive jobs number as they are very closely tied to employment.

·         Transports: Transports are higher today, pretty much in line with the tape following the jobs number. Rails are outperforming today, led higher by KSU and CSX. Freight is lagging a bit after moving higher throughout most of the week. TLs and LTLs are both outperforming today as investors shift money into the higher beta names. Airlines are mostly in line with the tape, which I guess could be considered underperformance given their high volatility.

·         Homebuilders: Builders are all outperforming today, up around 2-4%. The space has done a nice job of bouncing back from negative housing data over the past few weeks and has done just that this morning.

·         Materials: Materials are outperforming the market again today, sitting at their highs of the day, as the jobs number moves commodities higher on economic recovery hopes. Metals are all outperforming with almost every name up 2-5% on the day. Steel stocks are also outperforming, building off yesterday’s gains following the BHP/Nippon coal contract (price was $200/t while st. thought it would be around $180/t). Chemicals and fertilizers are also outperforming, up 2-4% as the market moves higher and in addition to some positive comments on the potash space from Goldman. Paper/packaging stocks are outperforming the market as well today.

·         Energy: Energy shares are the best space in the market today as the positive jobs number pushes oil up over $1.50 and above $81.50. Integrateds, servicers, and drillers are all outperforming to the tune of 1-3% as oil moves higher. E&Ps are stronger, although mostly just in line with the tape as natural gas only manages a 3c gain. Coal stocks are all outperforming, up around 2-5%, helped in part by news that Essar Group has agreed to buy Trinity Coal. Shipping/tanker stocks continue to outperform as they have all week, helped by the fact that the Baltic Dry Index is now up 12 of the last 13 days, over 20% since February 15. Solar stocks are mostly in line with the tape today on little news. 


Industrials/Materials/Energy Outliers

·         DAL is lagging airlines, up just slightly following its RASM release yesterday afternoon.

·         BEAV is up over 3.5% today, leading the aero/def names higher.

·         KBR, FLR, FWLT, and JEC are leading E&Cs higher this morning thanks to stronger crude.

·         CECO is up around 2.5%, leading education names higher after a price target increase at RBC Capital.

·         BID, RHI, and MAN are all up 3-5%, leading other business servicers higher following the jobs number.

·         CENX is up over 5.5%, leading other aluminum stocks up 2-3%.

·         MON is off 1.5% today after outperforming yesterday as shorts stopped themselves out.

·         Steels are outperforming on the back of BHP/Nippon settling a coal contract at $200/t, above expectations of around $180/t.

·         MEE is up over 5%, leading coal stocks higher.

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