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Afternoon Note

Time to Join the Billionaires

By Charles Payne, CEO & Principal Analyst
7/27/2017 1:06 PM
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While Facebook (FB) and Amazon (AMZN) are getting all the press for the big moves in their stocks and new position in the pantheon of wealth for Zuckerberg and Bezos (who is on his way to being the richest man to ever walk on the face of the planet, not adjusted for inflation). The most compelling action is in consumer discretionary stocks.

Not only are people are spending money in different ways than past years -just ask Jeff Bezos – they are also are spending it the old-fashioned way as well. Today’s top five movers in Consumer Discretionary (XLY) have had their obituary ready over the past several years.

Sector Performance

% Change

S&P 500 Index

 

+0.15%

Consumer Discretionary (XLY)

 

+0.91%

Consumer Staples (XLP)

 

+0.31%

Energy (XLE)

 

+0.11%

Financials (XLF)

-0.10%

 

Health Care (XLV)

-0.34%

 

Industrials (XLI)

-0.63%

 

Materials (XLB)

-0.10%

 

Technology (XLK)

 

+0.64%

Utilities (XLU)

-0.34%

 
 

Brick & Mortar

Tractor Supply (TSCO) posted solid earnings and is staying the course on opening new locations. During the second quarter, management has opened 14 flagship stores and 8 new Pet Sense stores, closing one only. This is an open position in our model portfolio but we have asked new subs not to buy until now when we will turn on the greenlight.

O'Reilly Automotive (ORLY) has stage remarkable rebound since its shares were annihilated earlier this month. There is still lots of upside room but I think the stock continues to stair step higher. The stock still needs a couple of good quarters to re-test pre-July highs.

Macy’s (M) continues to hint at some kind of rally. We aren’t in, but spying the stock that lost its mojo a long time ago, it is given the benefit of the doubt from a celebrity CEO.

Cable

Charter (CHTR) is crushing it today. The company reported a 3.9% increase in revenue to $10.4 billion driven by 3.8% increase in consumers (12.1% of that from internet), and 9.5% increase in commercial revenue.

The XLY is now at a double top – the ultimate technical hurdle and consumers are sitting on a lot of cash and on the cusp of meaningful wage increases. This is a breakout you want to own.

XLY

 


 

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