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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


Consumer Discretionary (XLY)


Consumer Staples (XLP)


Energy (XLE)


Financials (XLF)


Health Care (XLV)


Industrials (XLI)


Materials (XLB)


Real Estate (XLRE)


Technology (XLK)


Utilities (XLU)


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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