Wall Street Strategies
Hello! Sign in or Register


Take a Free Trial
Try Charles' premium stock selection services free for 7 days. Check it out in real time!
You will get actionable advice, trading ideas and email alerts.

Morning Commentary

Pushing & Pulling the Market
By Charles Payne, CEO & Principal Analyst
4/11/2017 8:56 AM

Optimism

The market continues to be filled with sound and fury, with wild daily swings that seem innocuous by the closing bell, but reflect forces on both sides struggling to set the pace. These narrow trading ranges can last for long periods of time when major indices are consolidating gains or simply struggling for direction.

The Dow Jones Industrial Average broke out through 16,000 in November 2013, and it seemed like it was off to the races; by December 2014, the index was testing 18,000. But it pulled back again testing that former resistance point (16,000) in February 2015. For the most part, the index was locked in a range for little more than two years.

Long term investors that didn’t fret were rewarded for their patience. Moreover, there were a ton of individual winners along the way. A positive in yesterday’s session was transportation, as the Dow Transportation index formed a cup and handle (bullish) formation.

http://markets.money.cnn.com/cgi-bin/upload.dll/file.png?z6a8f7c0azd9df2496077d48f883d5524240a33433

The rally was sparked by the trucking mega-merger between Knight and Swift. Unfortunately, only the airlines have less weight in the Dow Jones Transportation Index than truckers. FedEx and UPS at 13% and 8.4%, respectively, have the most influence. Still, transportation, which had a meteoric rally after the election, looks poised to make a big move and perhaps test the top, north of 9.500.

Angst

With consumer purchasing lagging behind sentiment surveys, the street is becoming leery of history repeating itself in the form of a new credit crisis. Keep in mind, mortgages are $8.48 trillion or 68% of total debt outstanding and the 90-day delinquency rate is relatively low but many are focusing on student loans and autos.

Last week, March auto sales came in below consensus even as incentives keep growing. Overall, auto loans have rocketed to $1.2 trillion, but it’s the pace of delinquencies that really has investors concerned. While the current rate is below recent peak delinquency rate for autos, 5.27% in 4Q10, it’s a yellow flag.

Lenders have already begun to take proactive measures, swiftly shifting loans to higher levels of credit scored over the course of the past three quarters of 2016.

Today’s Session

The market looks to open sideways as President Trump meets with business leaders at the White House with a focus on infrastructure and how to pay for it. The options are clear, but murky, as each carries a degree of economic and political risk. However, this has surged to the top of the “Must Do” list after Obamacare replacement unraveled.

  • Public-Private Investment
  • Debt
  • Taxes

Comments
Until out economy is running st a good pace this market is all smoke and mirrors for your average hard working american ,we need real get your hands dirty mfg.to come back to the us ,we all can't get 6 figure income jobs with some big fortune 500 company ,oh and let's not forget the us check book is ,20 trillion in the red ,wait until that bubble pops time is running out and my optimism is getting thin .we need real jobs now today nothing else matters ,good luck USA

chester chambers on 4/11/2017 11:08:41 AM
 

Add a Comment!

Name:
Email:
Comment:
 
 
Submitted comments are subject to moderation before posting.


BLOGROLL
Differential Research


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Updated Privacy Policy | Terms of Use |
All Rights Reserved.