00:00 Josh
Josh, a little bit of red, but, you know, the S&P 500 has not done a lot lately. That’s why I’m saying the S&P 500 has gone fishing.
00:07 Speaker A
Let’s check out uh, remember last year December 31st, S&P 500 closed at what was it? 68 444 and change. and we have had five closes in a row that were within half a percentage point of that. So the S&P has just been swinging from a loss to a gain to a loss all week long and that’s just a whole lot of nothing. That doesn’t mean that much, but I want to show you the longer term perspective here and I’ve shown this before. This is the last six months and for about the last four of those, the S&P 500 has basically been going sideways.
00:46 Speaker A
Here’s the Nasdaq Composite, similar story except a little bit longer. You can add one month to that, maybe back to September. And then we got the Dow. This is a different story. It’s been trending up. So that’s really what you want to see there. And guess what? The Dow has industrials as well and I’ll just go back to my screen here.
01:00 Josh
S&P 500 trading sideways. I’ll write that in the minute. But under the hood, some interesting moves.
01:06 Speaker A
Yes. And the key term here is industrials. Industrials have been doing the heavy lifting, not only in the Dow, but the S&P 500. So let me go to our sector heat map and I’ll show you what’s been happening. This is uh today. You can see industrials closed number two, but let me just show you year to date. They are number three here, second only to materials and energy. But energy and materials are very small sectors. Energy’s about 3% by market cap cap of the S&P. Materials is something like 2%. Industrials is close to 10%. So it’s really been doing a lot of the heavy lifting. And I just want to show you a few of my heat maps here and we’ll go to industrials. Uh this is not the Dow. There is a some more uh mix of uh well, less of a mix of companies. These are straight industrials, but you can see Lockheed Martin up 37%, Honeywell up 23%. Uh Cleveland Cliffs is the outlier, it’s down 22%. By no means is this exhaustive, but I was checking out the agriculture stocks today and Deere. That was up like what? 12%, 11 and a half percent today alone. This stock has been on fire and over the last 10 years, um you can see there was two spurts. This in the pandemic was like 250% and we are in another one right now that’s something like 50% off of these lows. Point is this was a 12 months in a row of straight wins. This is only five and so there might be some uh winds to go there in the coming months if the symmetry holds. And just what AI is doing for agriculture, uh Jake Conley was sharing some B of A research notes with me, absolutely phenomenal.
02:41 Josh
Should we talk about headwinds?
02:43 Speaker A
Yeah, let’s talk about that. A little bit of a negative vibe here and that might account for some of the uh down drafts that we’ve seen in the indices and other maybe even commodities, certain commodities lately. Here’s a dollar pain trade. So let’s check out what the Dixie is doing. And for that, we’re going to go back to our map here. Basically, it’s been higher for four straight days. and that’s not a huge deal. and if I show you the longer term part chart, you’re going to say, well, big deal there. This is the last six months. We’ll stick with that time frame. We uh came, we broke this support line. This is from earlier there, but that’s a longer term support. And then we immediately rocketed higher. So that was a pain trade right there. And then in one day, we had one day where there’s just a big wipe out in dollar losses. Everybody was saying, okay, we’re going to be heading down. We’re going to break these lows again. The whole street has been dollar bearish and for very good reasons for over a year because that’s the night you look at all the facts, you got to say the dollar is going lower. But it is snuck up here and I think that’s a pain trade. and if it goes much higher, it’s going to be additional pain. So that weighs on not only international stocks because of their earnings, but also commodities, also crypto. There’s a lot of stuff going on there. So that the dollar is what I’m watching.
03:52 Speaker A
One more thing, the VIx here. Uh the VIx has been trending up all year long. This is a six month view, but this is what’s happened basically since the end of December and we don’t have anything approaching the peaks that we saw in October and November of last year. But the VIx over 20 and and kind of comfortably staying there, I pay attention to that because it could mean that something’s happening under the radar.
04:06 Josh
Finally, give me the headlines. I feel like we should end on oil.
04:08 Speaker A
Yeah, let’s do that.
04:10 Speaker A
So, I said there were some headwinds in commodities, but not crude oil. And crude oil is just operating off of geopolitical uh fundamentals here. Let me get this back to an intraday and CL equals F up 2.18%. And if I show you a six-month short here, you’re going to see basically the highest price in that time frame. Shown this chart a lot. This is five years because this captures the entire uh that $130 spike that we saw when the Russia invaded Ukraine. and I’ll draw this trend line. This is something I showed earlier in the week. We have to get above 70 and we’re just a few bucks away from that right now. But you punch above 70, that changes the technicals and the tacticals. and so that could happen, but you’re going to need a more drastic headline that we’ve seen so far. and of course, that’s not good for drivers, not necessarily what you want, but if you’re looking for higher oil, that’s what we need to happen.
05:07 Josh
All right, thank you, buddy. Appreciate it.