Market Overview: Leading Sectors, Styles & Geographies

Market Commentary: The Federal Reserve's Open Market Committee met today and kept rates steady, as was widely expected. The FOMC statement said inflation was still the “predominant” risk for the economy, suggesting the bias remains toward higher rates. Market participants increasingly view these announcements as non-events. That may be a mistake - Bernanke must know that he has not yet gained Wall Street's confidence. He could easily decide to establish his credibility by doing something unexpected, jarring awake a market that has become complacent. Market benchmarks remain buoyant with the S&P 500 very close to an all time closing high.

Sectors: Energy, Utilities, Telecom, and Materials are leaders of the pack. Merger activity is driving materials stocks higher despite softness in commodity prices. Healthcare, especially pharmaceuticals and biotechnology, is picking up momentum and could move into the leadership soon.

Styles: The style category is marked by convergence. Large caps and mid caps are neck and neck, with the small cap category close behind. Micro cap is the worst performing area. The tenacious buyout binge that we are accustomed to hearing about these days is driving the larger type stocks to outperformance, as it seems that any and every stock is in play now.

International: Latin American markets are now outperforming the rest of the world. France’s election is over, and its market has zoomed to new highs. Other European Continental markets hitting recent highs are Belgium, Germany, Italy, Sweden, and Switzerland. The EU, Pacific ex-Japan, and even Canada – a beneficiary of the metals and mining melt up, round out the top of the list. Japan hovers near the bottom, with substantially lower momentum than the U.S., which is the next weakest market.