Industrial Backbone:

This week certainly had the feel of all the recent chatter that anticipated moves into more “value” oriented area. The barbell approach may start beginning to pay off. Looking below at the WEEKLY performance of the 11 major S&P sectors, shows a robust move from the industrials advancing nearly 5% (six of its last 7 WEEKLY gains rose by at least 4%). This move has been somewhat quiet, but the XLI is also the best acting group on both a one and three month look back period. On a YTD basis it still clearly lags, as it is just the NINTH best actor among the 11 major S&P groups (keep in mind it has never on a YTD timeframe been the top performer). Some of the areas that contributed to the solid weekly action were the airlines, which via the JETS ETF rose everyday this week jumping 7.8%. The rails put up some strong behavior with best in breed KSU up a combined 20% the last 2 weeks, both in active volume. And Friday afternoon came word that schools in NYC area, where I am from, will be opening this fall. That is a good sign, not just for parents in the tri state area, but for the continuation of the economy reopening, which should be wind at the back of the industrial space.

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