Earlier this year we pondered whether the industrial group could keep up its solid early YTD performance. It was the second best major S&P sector lagging only technology early on. It is silly to make predictions, but dating back to 1993 the space was never the best performing group, and that made it likely the gains would fade as ’19 carried on. Fast forward to today and the leaderboard shows it has now dropped to the fifth spot from the second, albeit it is less than 1% from the same runner up level. BA still remains in bear market mode down 21% from most recent 52 week highs and met resistance Friday at its 200 day SMA. MMM lost 25% the last 4 weeks and this one started off where it left off last week down almost 2% Monday. The XLI has a couple anchors weighing on it.
In the not too distant past we posted a ratio chart comparing the two behemoths in the delivery services space, UPS and FDX. The former recently was a better relative performer, and still is now down 21% from most recent 52 week highs compared to FDX’s 37%. But let that sink in. FDX which has an excellent pulse on the global economy is more than ONE THIRD off its highs, and it still does not seem to be garnering much attention. Obviously the stock is under heavy distribution (selling in above average volume), but its last week of accumulation is dating back to the week ending 12/22/17. Below is the chart of UPS, and as we mentioned the better relative actor, but on an absolute basis is still down 21% from recent peaks. Not the type of returns shareholders want to be delivered, pun intended.
The headline from the 5/3 Industrial Report was “Buy GE As It Brings Good Things To Life”. Looks like I am dead WRONG about this, and it is a good lesson buying names in an overall downtrend. The stock has been in the news plenty in the last year, with new leadership, selling assets, but peering at a longer term chart shows the bearishness is still intact. It trades 37% off most recent 52 week highs, and that is even with the nearly double from the late December lows to the late February highs. Keep in mind, some of the most breathtaking moves higher occur during bear market, dead cat bounces. There are better places to put your capital to work.