Industrial Fortitude:

Although the industrial sector is up just 1% YTD, it is gathering momentum. It is often categorized in the “value” arena, which has been a trap for years, but some nascent strength is beginning to make its presence felt. Over the last 3 month period the XLI is the second best major S&P sector out of 11, up more than 13%, even edging out technology. Durability in the group is often interpreted as economic firmness, and the sub sectors within that helped the most over the last 3 months were delivery services and heavy construction. FDX and UPS are higher by 75 and 47% respectively in the time frame. FDX is up nearly 4% this week so far and if that holds tomorrow would be a 12 week winning streak. Are investors anticipating a big infrastructure package regardless of who wins the election in a few weeks? That has been a let down time after time with those forecasting such a development, but PRICE action with PWR and ACM are speaking volumes. As Thoreau stated, “its not what you look at that matters, its what you see.” If investors are not seeing anything but probable strength with the 4 names mentioned going forward, they probably have a strong bias.

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