According to a recent study by Strategas*, statistics show that industrials are starting to lead the market, largely driven by impressive earnings.
Strategas noted: “We remain impressed with the response from the Industrial stocks this earnings season – the sector is having its best 10-day performance run since the 2016 election and new highs are again starting to expand. Both conditions reflect a momentum spark and have historically bullish implications…The small-cap Industrials sector is also on the verge of fresh highs.”
This is important to note because it is evidence that fiscal stimulus can have an impact on propelling economic growth and that the market is appreciative of this.
*Momentum Spark for Industrials, Strategas Technical Strategy, August 1, 2018.