Return of the cyclicals


The US stock market is off to an explosive start in 2019.

As February draws to a close, the Dow Jones Industrial Average and S&P 500 Index are up more than 11% on the year. The tech-laden NASDAQ Composite Index has advanced nearly 14%.


investing


The good news is that cyclical stocks, whose performance typically reflects the underlying strength of the US economy, are a big part of the reason.


Winning Streak


As the Wall Street Journal points out, industrial, financial and energy stocks have catapulted the Dow forward “for nine consecutive weeks—the longest such winning streak since 1995.”

Here are the individual stocks powering the rally:



Another promising trend is the strong performance of commodities, also a potential sign of vitality in the US economy.

Takeaway

In my view, stock investors have taken heart from signs that the US Federal Reserve has taken a breather in its campaign to raise interest rates from historic lows.

Worries about slowing earnings growth haven’t tripped up the rally yet.

It’s still early in 2019, but I think investors have reason to cheer about the overall market performance so far.

Photo Credit: Artrem Katranzhi via Flickr Creative Commons


Xavier Brenner

About Xavier Brenner

Xavier Brenner has covered global market, business and economic trends for Interactive Brokers Asset Management since 2013. An experienced financial journalist, Brenner offers analysis and insights on the stories that matter to the discerning investor.