Following last week's return of volatility and Monday's expected follow-through, we issued our weekly Sector Note on Tuesday.
The long-term advance is intact but experiencing a correction. The shock to sentiment is a function of sustained complacency, and at present does not appear to represent more than an intermediate-term downtrend or, more accurately, a correction. Defensive sectors are the beneficiary of both a relative lack of selling, and heavier selling in the cyclical sectors and as such, the cyclicals will require time to repair.
Backing-and-filling favors relative value seekers. Commodities eased globally and likely add to emerging favorable momentum to Energy and Materials, however these remain in the speculative domain for all but the deepest value investors.
Sentiment remains the principal market driver as excess credit fades and the cycle matures. Please see our 5/29/15 Strategic Focus for our analysis of both excessive historic valuations and analysis of the long-term cyclical component in sector profit margins.
Please contact us for a copy of the report and to view all disclosures.
Steven Charest Managing Director, Chief Market Strategist firstname.lastname@example.org
DIVINE CAPITAL MARKETS LLC 39 Broadway, 36th Floor, NY, NY 10006 tel 212 344 5867 fax 212 509 5867 Member FINRA SIPC MSRB
Divine Capital Markets LLC is a leading women-owned securities brokerage and investment banking firm. We are recognized for providing institutions, corporations and accredited investors with high quality agency execution, independent research and trading strategies, corporate finance and consulting services, and private wealth management.
This E-mail is the property of Divine Capital Markets LLC. Divine Capital archives and reviews outgoing and incoming e-mail. Such may be produced at the request of regulators. Sender accepts no liability for any errors or omissions arising as a result of transmission. Use by other than intended recipients is prohibited. This is neither an offer nor a solicitation of an offer to buy or sell securities. Opinions or estimates constitute our best judgment at this time and are subject to change without notice. Information upon which this material is based was obtained from sources believed to be reliable but has not been verified. This is for use by professional or institutional investors only.