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Morning Commentary

The Key To Chasing

By Charles Payne, CEO & Principal Analyst
11/7/2017 9:30 AM
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Monday was another session for the record books as the Dow, NASDAQ, and the S&P 500 spurted to new highs. It was a more compelling session than the slim gains for major indices would suggest. 

The market breadth was overwhelmingly bullish as advancing volume doubled declining volume for the NYSE and the NASDAQ. However, 52-week winners and losers reveal the nature of this rally – where the winners keep winning and the losers keep losing.

Market Breadth



Merger Mania

Merger mania was the talk of the session with the rumor I mentioned Friday night; Broadcom (AVGO) was offering Qualcomm (QCOM) $70 a share in a potential $130 billion deal (offer is too low).

There is a lot of media scuttlebutt that Disney (DIS) has been in talks with Twenty-First Century Fox (FOXA) about buying most of the company’s assets shares of both companies climbed on the rumor, indicating that Wall Street would approve of such a merger.  

Quiet Gusher

The best performing sector by far was energy as that crude breakout from last week picked up momentum after a major arrest of 10 senior princes in Saudi Arabia, including Prince Al-Waleed bin Talal and dozens of ministers on charges of money laundering and corruption.

Those arrested are cooling their heels at the Ritz Carlton, which is better than the fate of one prince who died in a helicopter accident (wink wink).

The world watches as the Middle Kingdom and its heir apparent wants to be a model of Islamic moderation, which means allowing women to have driver’s licenses. There is no doubt that the hardline taken after the Arab Spring wasn’t a good fit for the nation, but as Iran flexes its muscles, Saudi Arabia cannot afford to get things wrong.

Those arrested represent more than $33.0 billion in personal wealth and have deep political and Wall Street connections. With the largest IPO in the history of the world in the queue, it’s going to be interesting to see how seriously financiers take the new religion of Saudi Arabia.

Impact on Crude

Through it all, Saudi Arabia continues to express a desire to end the world’s oil glut. West Texas Intermediate (WTI) closed at a multi-year high point of $57.35, but…

...the S&P Oil Index (XLE) is still down 7% for 2017. The sector certainly has values.

Value Traps

This brings me to the anxiety for investors, including many fence-sitters looking to buy now -buy stocks that are down or chase?

I know everyone is afraid of buying the top.  No one wants to feel like a chump as our pride and ego bruise easily.

This happened to me earlier in the year when I asked subscribers to buy Weight Watchers (WTW) at $10.00 for an oversold bounce. We got out at $14.00; while I cheered the 40% gain, I could see the fundamentals were rapidly improving, but I waited and waited and missed the stock which hit $49.00 after the close on its latest earnings release.

Here’s the key to the dilemma of chasing:

Buy stocks when the underlying fundamentals are improving even faster than the share price. There are a lot of ways to measure this from peer reviews and market share gains, but also glance at next year’s earnings estimates.  As we exit earnings season, investors are armed with fresh information. 

You know Apple (AAPL) is selling iPhones like hotcakes around the world, and even their tablet and iPad businesses are rebounding. Three months ago, Wall Street modeled for Apple to earn $10.67 in FY18; now that number is $11.17, and it’s sure to go even higher.

The special report Charles mentioned on last night's now "Chasing The Market" is ready, to get a copy contact your representative or send an email to research@wstreet.com. 

Darren Drake and the Victims

Last Tuesday, NYC experienced its worst terror attack since 9-11 as a crazed man doing the bidding of ISIS drove a rental truck down a Manhattan bike path.

The carnage was immediate and deadly.  A swath of bicycles twisted into macabre shapes shared the path with dead and injured bodies.

With less than three hours before our show, we threw out the rundown and began to gather as many facts as possible with a focus on the terrorist. We needed his name, associates, family, birthplace, and I had to learn the pronunciation of his name.

I remember scanning the names of the victims in a few articles, but the focus was on why and how to stop monsters from entering America whose singular goal was to destroy our way of life.

Then last Friday, I got a call from Father David - the priest at my wife’s church. He reminded me that I met one of the victims of the terror attack: Darren Drake.

I just met him this summer at an event for Father David, and we spent a lot of time talking about a variety of subjects, including cufflinks.  I Googled Darren Drake; when his photo popped up, I burst into tears. 

Darren’s father wanted me to come to the funeral because he says Darren had a “profound admiration” for me.  Those words made me weep even more because I never took the time to memorize, or even learn the correct pronunciation of names of any of the victims.

I didn’t stop to look at their faces and find out where they came from and what their interests were.  I felt ashamed. 

Yesterday morning, I embraced Darren’s dad at the funeral service and prayed for the family as they sent their amazing son home to be with his heavenly father.

Today, I ask everyone to learn about the victims of horrific violence because they each have a story – wonderful stories that are more important than the names of evil that targeted them.

Sadly, 26 more names were added to this list yesterday. Take the time to learn a little about them. Honor and say a prayer for them, starting with Darren tonight.

Thank you.


I am requesting a copy of "Chasing The Market" sent to my email address please.

Thank You,

Tony Mancini

anthony Mancini on 11/7/2017 9:54:58 AM
TV broadcasts: Perp pictures smaller & less TV time. Victims bigger.
We used to put nut jobs behind a tall fence.
Hold harmless 10+ year experienced Doctors adding names to various risk levels database that police/Social services get an alert if in there system.
Police required to do a spot home check like they do now
to protect foster kids looking for weapons or drugs.

Mackcap on 11/7/2017 10:28:09 AM
Glad your back

Walt Ericson on 11/7/2017 12:08:47 PM
Mr. Payne, your commentary on Darren Drake was beautifully done and moving. I also saw your on-air comments on this topic yesterday. Thank you for caring and for making this insightful observations.

R. J. Herson on 11/7/2017 12:44:03 PM
Thank you very much R.J. its been a moving experience. So much evil out there we can forget who we are as our faith is tested. I'm not going to let that happen to me but its chipping away at the nation overall. CP

Charles Payne on 11/7/2017 2:22:15 PM
Charles, I hate to say it, but our own Christian teachings of kindness, compassion and mercy help to support the forgiveness that is shown to those individuals who exhibit such true EVIL in our society. I would LOVE to point a finger at the so-called liberal, "bleeding hearts" who URGE us, as a community, to provide INCREASED mental support programs and institutions because they feel a continued LACK of such facilities and offerings are to BLAME for the actions of these totally deranged individuals...and perhaps, to a certain extent, there is some TRUTH in what they say and are promoting. However, I look at the beheadings by ISIS/ISIL madmen and the calls for jihad by such radicals in the Middle East and AROUND the WORLD...and realize that NO mental health program is going to CHANGE the outright craziness exhibited by these loonies. Actions such as the New York City slaughtering of innocents and the murdering of 26 Texas Christians while at worship service only causes me to shut my mind to calls by those urging America to provide increased mental health support. We ALL need to be ever more vigilant in our daily lives because tragedy seems to INCREASINGLY strike without warning. Such has been the case since 9/11 and in my humble opinion will continue to prevail no matter HOW aware we are to our surroundings.

James Warlin on 11/7/2017 1:45:05 PM
Sow the wind, reap the whirlwind. We are finally paying the price in a big way for the decline in public morality that began in the '50's, '60's and '70's with the Kinsey, Hefner and Roe v. Wade era while Hollywood and the media cheered it on. All it takes is tolerance and acceptance of this by a percentage of the population to seriously affect us all. Political correctness is simply looking the other way while society declines, but in fact it is nothing more than rejection and denial of the fundamental moral laws that have inspired every great civilization from the Greeks to Christianity to our own founding fathers and their great Declaration of Independence. Why are there 600 murders a year in Chicago? What ticks in the minds of the madmen in Las Vegas and Southerland Springs? Where did they come to believe that life is so cheap? This should be no surprise in a society that tolerates the easy dispatch of 61 million babes in the womb -- a place that God designed as the safest place in the world. And this fully endorsed by our own highest court of law. Is it any wonder that the children of Chicago grow up in a world where life is so cheap that we don't even remember the names of those who die in its streets week after week. It's not the guns. It's all of us who mourn only after the most terrible deeds are done, and look the other way when the killing is the easy way out for widespread sexual irresponsibility. It is time we faced our own responsibility and come to a genuine change of heart about the preciousness of every human life -- black, white, young, old, born or unborn. The headlines hint at the end of the Hefner-Weinstein-Clinton era, but that requires a widespread of heart at all levels of our society. Without that, our moral and spiritual decline will very likely continue. We know how Rome ended. How will our civilization be remembered?

Dennis Howard on 11/8/2017 10:22:14 AM

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