NEW YORK (Reuters) - the signs of a sale-off Wall Street are everywhere, but US stocks could survive another week relatively unscathed if investors continue to bet on an economic slowdown less vulnerable areas.
Pressure for a correction in the stock market has been put in place in recent weeks as the euro and oil prices fell in tandem, hitting the actions of energy companies and multinationals dollar sensitive.
Still, investors have avoided a large predatory by diving in shares of companies that are less vulnerable to the economic cycle, including defensive sectors well known such as utilities and household products, but also business of gros-cap with the performance of regular pay.
This strategy may keep the market afloat for a little longer. But with the end of easy money by reserve policies Federal just around the corner, investors are becoming more sensitive to the risks in General.
"There is reason for a pause, there is good reason to be conservative here and there is a valid reason to raise some species advance of a correction of the summer and an opportunity to best buy,", said Richard Rossglobal technical strategist with Auerbach Grayson in New York.
The liquidation sharp in commodity markets earlier this month was considered by many as the first sign of a market correction alert come. The dollar has strengthened since then, in another sign that decreases appetite for risk.
Following the end of the month of bond-purchasing massive program the Fed, also known as quantitative easing, should demolish the value of stocks of products base and the euro, a recent survey of Reuters analysts and managers of funds found 64.
CONSUMER STAPLES IN STYLE
Ross, who believes that a correction could come at any time, warned that Wall Street remains near the multi-year peaks at the head of the investors in a traditional period of low seasonality which extends from May to November.
Index 500 the Standard & Poor (.)(SPX) retained its gain to date of 6 percent for the past two weeks, as defensive sectors such as utilities advanced while the more volatile technology shares posted losses.
Despite the rotation between sectors, S & P 500 was trading in a narrow range between 1330 and 1340, indicating the absence of Wall Street for direction. Technical analysts most agree that the market is poised to come out of this range soon - with a liquidation or a rally.
Robert Sluymer, an analyst with RBC capital markets said there was no technical evidence that the current market cycle has peaked. It was recommended that investors keep construction of the defensive themes exposure, getting cyclical stocks.
Among the defensive sectors has fostered in the current environment, Equity strategy Standard & Poor recommended stocks of the S & P 500 Consumer Staples Index (.)(ENCRYPTED). For the week, the index was from 0.6 per cent.
With the earnings season comes to an end, Wall Street will be just a sprinkling of marquee names set to release quarterly results in the coming week. Tap returned to Campbell Soup (CPB).(N), Costco Wholesale Corp. (cost).(O) and HJ Heinz Co (HNZ)(N), with stocks in the S & P 500 Staples index for consumption. Preppies, take note: Polo Ralph Lauren Corp. (RL).(N), and Tiffany & Co (TIF).(N) are also set to release their results. Prospects of these companies could shed light on the
consumer mentality and contrary winds, the retail sector.
With regard to economic indicators, there is no data with an overwhelming star power. The calendar includes sales for April, a second look at the gross domestic product in the first quarter, personal income and consumption for April and the final reading for may on among consumers of Thomson Reuters/University of Michigan surveys of consumers.
So investors may well be at the merci of the newspapers of Europe, where fears of a restructuring of the debt as possible by the Greece are on the rise.
With the euro, raw materials and stocks to trade with the extraordinary correlation, investors should watch trade euro dollar of the Directorate, said Ross of Auerbach Grayson.
"If you continue to see the strengthening of the dollar,"he said, "it should provide basic and S & P. products face the wind" ""
(Edited by Jan Paschal)
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