Analysts were busy over the weekend and came in after the holiday weekend with another heavy slate of upgrades. Analysts upgraded 3.5 stocks for every downgrade. Its clear that the upgrade cycle is still in motion and analysts remain well behind the curve. This has and will continue to bolster markets. It remains one of the primary reasons why I don’t believe this dip will ultimately be seen as a major market top.
Notable earnings upgrades include a Goldman upgrade of homebuilders Lennar and KB Home – both reflect improving trends in the real estate market and should benefit from the first time homebuyers tax credit.
In other news, the manufacturing sector got its first taste of economic activity in February and it was a very positive one. The Empire State Manufacturing index rose to 24.91 which was substantially higher than analyst’s expectations at 18. The brightest signs of improvement come from the New Orders and employment. Both posted solid gains on a month over month basis. Both show continued positive trends in the broader economy and the likelihood for job gains in coming months.