Industrial Strength

The industrial sector is the lynchpin for the U.S. stock market.  For as go industrials, so goes the S&P 500 Index.  And a big part of the rosy earnings outlook for the broader stock market through the end of next year is riding on renewed strength in the industrial sector after an extended dormant stretch over the past few years.  It is a bold forecast, and it is already under heavy fire thanks to some prominent industrial names having slashed their outlooks in recent days.  Thus, several key companies warrant close attention in the coming days.  For if a few more big names end up guiding lower in the coming weeks, it will almost place the lofty earnings forecasts for the already richly valued stock market in the coming year almost certainly out of reach.  Not only would this bode ill for cyclical stocks, but also the broader market in general in the coming quarters.

Please click on the link to read more of my article on Seeking Alpha.

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