S&P 500 Industrials

Manufacturing output is up 2.1% over the past two months to the highest since July 2008. Leading the gain was auto output--up 8.5% the past two months. Rising to a new record high was business equipment output--up 3.3% over the same period. December’s gain in business equipment was widespread, with output of industrial, transit, and information & processing equipment up 2.1%, 1.9%, and 0.6%, respectively. Consumer goods output was little changed after a 0.9% advance in November.

During the bull market since March 9, 2009, Industrials have been among the three top- performing sectors of the 10 in the S&P 500. It edged lower yesterday, weighed down by Boeing’s nightmare with its Dreamliner. However, it did manage to rise to a new cyclical high on Tuesday. The recent rally in Industrials has been mostly led by rising valuations, while forward earnings have been flat. Investors must be anticipating better global growth and perceive that the stocks are relatively cheap.

Today's Morning Briefing: Zero Hedge Thirty. (1) Fight Club: Durden vs. Draghi. (2) Last few “bubble months” before the bull is killed? (3) Lots of shocking numbers in Europe. (4) Draghi sees a recovery later this year. (5) Some good numbers. (6) Capital markets wide open for Italy and Spain. (7) France: change we can believe in? (8) Trade surplus in Italy. (9) Moving toward banking union. (10) The Dark Knight lightens up a bit. (11) Despite Boeing's woes, Industrials should continue to fly. (More for subscribers.)