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Morning Commentary

A Little Swagger

By Charles Payne, CEO & Principal Analyst
5/16/2017 9:23 AM
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It was a solid start to the week on Monday as all the major indices rallied higher:

The big winner was crude oil with West Texas Intermediate (WTI) up $0.96 or 2.0% as Russia and Saudi Arabia are willing to extend the Organization of the Petroleum Exporting Countries (OPEC) production cuts.  A close above $50.00 could spark a major breakout with a leg higher.

There were several storylines and narratives during the session, including cyber stocks and homebuilders. In a rare occurrence, all the 11 sectors within the S&P 500 traded higher.

 

S&P 500 Index

+0.48%

Consumer Discretionary (XLY)

+0.02%

Consumer Staples (XLP)

+0.33%

Energy (XLE)

+0.78%

Financials (XLF)

+0.76%

Health Care (XLV)

+0.65%

Industrials (XLI)

+0.47%

Materials (XLB)

+0.87%

Real Estate (XLRE)

+0.45%

Technology (XLK)

+0.56%

Utilities (XLU)

+0.43%

Buying Ahead of Earnings Releases

There were other signs of market optimism that matter even more for investors.

Message of the Market: Confidence

With only a few earnings report left in this cycle of releases, Wall Street took a very bullish stance yesterday.  Consider the action ahead of releases:

These are major moves on convincing volume that I would say is more about honest number-crunching than guesswork. 

Investors entered earnings season with a fair amount of anxiety, and they exited with a little swagger and a little pep in their step. 

However, in the fourth quarter of 2014, corporate profits climbed to a record 1.7 trillion and spiraled into a free fall that crumbled to less than $1.4 trillion a year later.  With more than 90% of companies reporting for the first quarter in U.S. corporate profits, they are on pace for a new all-time record.

Today's Session

The major indices are set to continue their winning streak.  New data on housing starts, out this morning, shows a decline of 2.6% to 1.17 million annual units versus the estimate for 1.26 million due in large part to a 9.2% drop in multi-family construction. Permits were down 2.5% to 1.23 million, but is still 5.7% higher than a year ago. 

 


 

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