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Afternoon Note

Slight uptick in Angst but Rally Continues

By Charles Payne, CEO & Principal Analyst
7/17/2017 2:02 PM
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The market is churning a bit, not unlike economic data, especially soft data surveys, which continue to echo the same theme; an air of excitement being tempered by growing skepticism that D.C. dysfunction will slow, if not kill, the growth agenda.

The latest example of this comes from this morning’s report on manufacturing in New York state.   The Empire Fed report came in at 9.8 from 19.8 in June and below consensus of 15.0.  Key components for current conditions, and six months out, all declined from the prior month.  The numbers are still positive.  In fact, the report has been positive in six of the seven months this year, but the trajectory is a reminder of mounting angst.

Empire State I Current Conditions

July

June

General

9.8

19.8

New Orders

13.3

18.1

Shipments

10.5

22.3

Prices Paid

21.3

20.0

Number of Employees

3.9

7.7

 

Empire State I Expectations

July

June

General

34.9

41.7

New Orders

33.4

42.2

Shipments

33.9

35.0

Prices Paid

30.7

33.1

Number of Employees

11.8

12.3

We are watching the tape closely as some early tech buying is fading as sellers emerge and blue-chip names began to pick up steam.  There is no doubt, earnings and guidance must be monumental for many tech names (note: tech leaders Amazon and Apple caught target upgrades this morning $1,200 and $182, respectively).  By the same token, smart money has been accumulating domestic company stocks and other value plays.

One of those names skyrocketing today is Snap on Tools (SNA), an absolutely favorite of mine, not only from a business perspective, but the CEO is an American hero.

Home Sweet Home

One area that could change the trajectory of the US economy, turning it sharply higher, is household formation.  This, coupled with bigger business investing, could send the economy into overdrive and beyond that now mythical 3% GDP hurdle. Please review our update on Homebuilders http://www.wstreet.com/investing/stocks/40488_homebuilders_industry_update.html. 


 

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