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Morning Commentary

Taking Off

By Charles Payne, CEO & Principal Analyst
3/12/2018 9:39 AM
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On Friday, it was a monster session for the stock market, fueled by a monster jobs report underscoring an economy that’s on fire. However, with enough room to grow that cooler heads should guide Fed policy.  Meanwhile, the Dow is still in that 2000-point trading range despite trading up 441 points. 

Industrial names were the second-best performing S&P sector, led by Deere & Co (DE) and United Rentals (URI). But the action in work uniform-maker Cintas Group (CTAS) best represents this jobs report, which points to a return to glory of folks that work with their hands as well as their minds.

I also love the action in materials names with a perennial favorite Sherwin Williams (SHW), which rocked. Also, check out the potash maker Mosaic Co (MOS); years ago, this was the hottest stock in the market. 

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)



In technology, it was the semiconductors that ruled again.  I’ve been mentioning them, and they are crushing the shorts and record books.  After collapsing from its peak back in March 2000, the Philadelphia Semiconductor Index needed more than 18 years to rebound. 

Now, it’s off to the races again. When investors consider if they are chasing these names, they could consider the fact they are barely higher after almost two decades.

Investor Indifference

I just worry you are not in this market. According to the American Association of Individual Investors (AAII), bearishness eclipsed bullishness over the past week, but it’s the surge in folks claiming to be neutral that worries me. 

I really hope you aren’t cheering from the sidelines, thinking you don’t have a right to be in the market. This is your stock market. Too many people are still waiting and waiting.

There wasn’t a lot of big-time data or big company earnings last week to nudge the market either way, which gives us a better feeling for investor bias. 

Of course, there’s always political news and the usual chorus of nonsense that comes with any suggestion of challenging the status quo.

The economy is taking off!

The stock market is taking off!

I think there is a lot of room on this runway.

Today’s Session

Equity futures tighten up as we approached the open and are well off the highest points earlier this morning.  Overall, equity bias is to the upside, but outside of tech, there aren’t any visible catalysts.  That changes, however, as the market drifts higher.  Then, there will be a greater sense of urgency, which could propel the Dow and S&P higher.

On the other hand, technology has already lifted the NASDAQ higher, and this morning, Nomura upped its target on Micron (MU) to $100 a share from $55.00.  A subset of the tech move is another wave of short squeezes as more than five percent of Micron is shorted. 

Today, President Trump visits a Boeing plant as the administration continues to focus on reworking our trade relationship with the world.  The optics are interesting since Boeing is the single largest exporting company in the United States, and the sizzling semiconductor sector is number two.

January Exports






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