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Zacks #1 Stocks on the Move 06/19/2013

Company Name Symbol %Change
RENEWABLE EN REGI
3.59%
SUPPORTCOM I SPRT
3.53%
SUMITOMO MIT SMFG
3.38%
NIPPON TELEG NTT
2.95%
HOOKER FURNI HOFT
2.75%
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PROFIT from the PROS

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The Spanish Connection

I have recently stated that only 3 things matter right now to the market: European debt, Chinese growth and the US economy (including corporate earnings). This is still true... but if I were to narrow it down to just 1 thing it would be Spanish debt.

When Spanish bond rates go higher, then European stocks tank and those problems wash to our shores as well.

And on Tuesday we saw the inverse. That being Spanish yields pulling back under the scary 6% level. This led to a massive stock rally on both sides of the Atlantic.

What happens going forward?

If you happen to be a great prognosticator on the movement of Spanish bond yields, then take your guess now. If you are not (which is 99.999% of you), then best keep an eye on the movement each day.

The further it moves under 6% the better for US stocks to get back to their bullish ways. But if it flares back above 6%, then we might need to get more defensive with our portfolios.

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Steve Reitmeister (aka Reity... pronounced "Righty")
Executive VP, Zacks Investment Research

 

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