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Morning Commentary

Itís Raining Money

By Charles Payne, CEO & Principal Analyst
6/29/2017 9:37 AM
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The big news on the avalanche of money banks are being allowed to shower on shareholders has a couple of narratives.  First, is the notion of being an owner rather than strictly being a customer.  I’ve been preaching this for so long.  It continues to baffle me that despite all the amazing stories of regular folks leaving behind fortunes or changing their family arc through owning (stocks, real estate, and businesses), it isn’t enough to get more folks involved.

In July 2012, the average 5-Year CD was paying 1.16%, and most bank stocks were still regaining their footing.  If you bought that CD seeking “safety” it would be worth $21,124 next month.  But if you decided to become part owner of the banks selling those CDs, you would have made up to 217% on your money.

Become an Owner of Great American Business and Change Your Life!

The Market Bounce Back

The markets bounced back yesterday as the S&P had its best session in two months, led by financials, which had investors champing at the bit for a potential ten-figure windfall.  The Comprehensive Capital Analysis & Review (Stress Test) will decide how much financials will be allowed to return to shareholders.  Consensus was hoping for $120 billion.  So far, after yesterday’s close, huge dividend hikes and massive share buybacks have been announced:

It should be noted, the buyback announcements for Citigroup and JP Morgan are their largest ever.

Financials soared after the election and have been considered by many to be part of the so-called Trump Trade due to the economy and dismantling Dodd Frank, but they have underperformed big time this year. 

These stocks soared in afterhours trading and are indicting higher at the open.


Regionals Step Up

The rally in the Regional Banks got a boost, including Zion’s announcement its hiking its dividend 300% through a series of increases to 2018.


Techs Back on Track

Techs were the second best performing sector bouncing back nicely after struggling early in the session when President Trump hinted at some kind of tax action against Amazon.  (Jeff Bezos is the founder of Amazon and also owns the Washington Post, which has run virtually non-stop negative articles against the President.)

The cracks in the armor of tech began when CNBC allowed a famous short-seller to verbally annihilate NVIDIA two weeks ago; that day, all the hot tech names gave up large gains.  Yesterday, NVIDIA led the tech pack, followed by Pay Pal, which I think is a screaming buy.


Broad Market

The market is also upbeat about the fact the Senate is going back to the drawing board on this healthcare plan, which could get a CBO score on Friday, and some are holding out hope that there might even be a vote on Friday.  That would be huge news for the market and a sign the Trump Economic Agenda train is moving out of the station.

For the broad market, looking at the charts of major indices, it’s almost embarrassing to admit lots of investors were edging toward a state of panic.  

Admittedly, we could see more volatility and even greater scares, but the fundamental underpinnings to this rally just keep getting better. 




CNBC seems to be moving more toward MSNBC sentiments on some of their braodcast. I watched a segment yesterday (11:00 - 12:00 EDT) where the guy from Insider.Com called the President a MORON, stupid and dangerous because of his tweet about AMZN. I understand politics influence markets and stocks but, MSM should leave those kinds of guest and commentaries to their tabloid shows on MSNBC and CNN.

Garro on 6/29/2017 9:47:08 AM
I will say what I have said MANY times in the past and that is that the closest news sources to being UNBIASED, FAIR and FACTUAL is the BBC. I was a broadcaster for over 30 years...one of the top in the L.A. market...and I know GOOD, HONEST journalism when I see it. So? If you want a TRUE picture (of as CLOSE to true as you will find ANYWHERE in the world)...the British Broadcasting Corporation should be your FIRST source of information. TRUST me on that!

James Warlin on 6/29/2017 1:32:05 PM
Hi Charles. As far as the $20K to $50K from CITIGROUP in five years (July 2012-July 2017) on your graph. From my recollection of personal experience with CITIGROUP, if you back up that $20K to 2008...in 2017 you might perhaps have $4K

Sergei Kowalchik on 6/29/2017 7:51:16 PM
Interesting here's the thing over the last two decades Americans began holding stocks a lot shorter periods. Now its only 3 months so I was trying to be a little more realistic as nobody would have held stock nine years- that said CD were also paying a lot more then so "owning" them would have been more attractive. That said good point thanks CP

Charles Payne on 6/29/2017 7:58:02 PM

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