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Afternoon Note

Consumers Remain Confident

By Charles Payne, CEO & Principal Analyst
9/26/2017 1:51 PM
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Economic data today is somewhat mixed, but with caveats.  Consumer confidence missed consensus.  Otherwise, it is pretty strong in the aftermath of Hurricanes Harvey and Irma, which had an impact:

“Consumer confidence decreased slightly in September after a marginal improvement in August,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Confidence in Texas and Florida, however, decreased considerably, as these two states were the most severely impacted by Hurricanes Harvey and Irma. Despite the slight downtick in confidence, consumers’ assessment of current conditions remains quite favorable and their expectations for the short-term suggest the economy will continue expanding at its current pace.”

Confidence remains high because folks see the jobs market getting better. 

Case –Shiller Home Price Index continues to gallop strongly, and the news has been so good, many are now worried it’s too good. 

The national survey is at a record high, 4.3% above the all-time high set in July 2006.  The closely watched 20-city survey is also approaching the all-time high as well.  I think there are serious issues with these runaway prices in places like Seattle and San Francisco, including income inequality.  Right now, however, I don’t think we are looking at a repeat of the housing time bomb.

We decided not to force the issue this morning, and on this note, think its wiser to hold onto cash even as our potential buy list expands.

Hey, Charles, as you are rotating out of the high flyers, take a look at CREE. This stock has been slipping for a few years, but just made a fantastic move that will drive them to BIG profits and market share in the next couple years. They just hired a super new CEO, who understands how to make a business run and value its people. There is no way this guy will fail to turn this company around, especially with a growing market. TXN would be at all-time highs instead of muddling along if the TI board had had the wherewithal to make him CEO in place of the current bonehead (instead of loosing him to become their competitor and beat the pants off them).

Bob G on 9/26/2017 2:42:24 PM

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