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Afternoon Note

Sentiment at Multi-Year Highs

By Charles Payne, CEO & Principal Analyst
3/2/2018 2:11 PM
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Consumers are still feeling good about things as sentiment is at multi-year highs even as rising interest rates loom. While the University of Michigan's final Index of Consumer Sentiment declined in February to 99.7 from the preliminary read of 99.9, it was above consensus of 99.5. 

Highlights from the report:


Today, during an interview, Commerce Secretary Wilbur Ross used a few props to dismiss concerns about new tariffs.  To illustrate his argument that the costs bumps would be small, he held up a can of Campbell’s Soup, noting “If that goes up by 25% that’s about six-tenth of one cent, who in the world is going to be too bothered by six- tenths of a cent?”

One of our largest trading partners and biggest steel exporter to the U.S., Canada, seems to feel differently.  Canadian Prime Minister Justin Trudeau commented, “We regard the implication of any new tariffs as absolutely unacceptable.”   

Yesterday, economists and analysts suggested that the new tariffs will possibly push up prices of goods that are made with metals, such as beer cans.

The Consumer Staples ETF, XLP, is leading the way higher, along with companies within the sector such as Mondelez International (MDLZ), Molson Coors (TAP), and Archer-Daniel-Midland Company (ADM), while Campbell Soup (CPB) is slightly lower. 

The market has reversed off the lows with certain stock taking the lead. It's days like today that give us a tell and differentiate the strong groups/companies from the crowd.  Groups leading the way today are Application Software: Splunk (SPLK), Veeva Systems (VEEV) and Retail: Macy’s (M), Kohls (KSS), Dillard’s (DSS), and Gap (GPS).

At the low of the day, the Dow Jones Industrial Average was down 391 points.  Currently, its down 170 points.  The S&P 500 and NASDAQ are hovering around the unchanged line.  The rally started shortly after the European close @ 11:30.

Fridays can be tricky as professional traders can be hesitant of headline risk over the weekend.  If the market were to close in the green today, it would be the third Friday in a row and a good ending to an extremely volatile week.

Charles, If the Canadian PM wants to complain, point him at the Canadian Tariffs on lumber entering the U.S. Furthermore, If the E.U. or Asians complain, point them to the Tariffs they charge us. We will lower our tariffs when they lower theirs. Free trade is a "Two Way Street Or It Isn't Free!!"

Dan Cooney on 3/2/2018 3:45:22 PM
Charles, thank you sir. We bought SPLUNK &held since you gave it as a pick of yours. Thank pres Trump &administration on your show, PLEASE. USA trades, are NEEDED more than EVER, FINALLY AFTER 8yrs, we workers are getting trade schools put back into the work programs, our journeyman trades are in desperate need of NEW apprenticeship program people. Pride, confidence, wealth knowledge skills, and self Reliance are BACK. No more handout, give people respect, by giving them work. Thank you sir.

Ed on 3/4/2018 1:01:38 AM
Thank you Ed for this every passionate email. I'm glad you bout SPLK and I feel your the nation to wake up and see its at a crossroad where we can choose to adapt by getting back to our roots or watch the world catch up and pass us by. Americans take for granted the place we have in the world there are lots of people under 50 that never been in combat, never been on brink of starvation, never knew other dire straits that we as a nation overcame to become the world's greatest country. Ever. CP

Charles Payne on 3/4/2018 9:56:01 AM

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