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Morning Commentary

Keep on Trucking

By Charles Payne, CEO & Principal Analyst
4/9/2018 9:38 AM
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Last Friday’s session and the week could be summed up as “no winners,” as trade, saber-rattling, and an instantaneous retreat from the media, the elitists, and all the smart people added to the volatility that was the mystery game of the next presidential tweet.  The battle is joined, and I think more Americans, upon learning the facts, will side with the notion of making a stand now before it’s too late.

S&P 500 Index

-2.19%

Consumer Discretionary (XLY)

-2.13%

Consumer Staples (XLP)

-1.02%

Energy (XLE)

-1.81%

Financials (XLF)

-2.41%

Health Care (XLV)

-2.41%

Industrials (XLI)

-2.77%

Materials (XLB)

-2.43%

Real Estate (XLRE)

-1.03%

Technology (XLK)

-2.45%

Utilities (XLU)

-0.79%

 

Leadership

I continue to think the market needs the leadership of the technology sector (XLF), but also consumer discretionary names as well. The S&P Consumer Discretionary Sector Index (XLY) is the best performer of the year, which is beginning to see mounting carnage in some areas.  

Sector

YTD

1YR

3YR

SPX

-2.6%

+10.5%

+25.1%

XLK

+0.2

+20.6%

+54.4%

XLY

+2.0%

+15.0%

+33.8%

 

Meanwhile…

The economy continues to truck along with orders for Class 8 trucks, hitting the second highest level ever and the best quarter in history.

Investor Guidance

I’ll reiterate.

First and foremost, let me begin by saying that I think the absolute worst thing an investor could do is to sell stocks simply because they’re going lower with the broad market.

Moreover, when great companies like Boeing (BA) and Caterpillar (CAT) come under pressure from headlines instead of actual developments, it means any stock is currently vulnerable. 

The market held at crucial points last week, but the big question remains: what could turn this market around?  The biggest and most important earnings aren’t until this coming Friday with several big banks, so we could see meandering; and yet, by the same token, the market is oversold - big time.

Today’s Session

It’s great to see the market indicating higher at the start of trading, but big issues and concerns haven’t gone away, and we have the real issue of what to do in Syria after yet another brazen chemical attack.   There is increased hope about a deal on China tariffs and trade barriers, and growing positive anticipation over corporate earnings.

I’m very pumped and ready to pounce.


Comments
Charles, thank you for your reassurance. I depend on you to help me keep this market in perspective so I don't fall into the emotional trap that is so tempting at times like this.

George Elliott on 4/9/2018 10:28:55 AM
Thanks George By the same token are you honestly looking at your positions to close those with fading investment propositions and also seeking some bargains on the dip? CP

Charles Payne on 4/9/2018 10:37:03 AM
Hi Charles

I am a new subscriber to your newsletter and have been watching your great show on Fox for years.

I like your market philosophy and am very bullish for the next year.

Iíll be considering your advice and recommendations seriously.

Bill Bram

Bill Bram on 4/9/2018 11:01:40 AM
What do you think about CVS. They are looking into Dialysis ó- at home process. A God send if properly designed.

Elizabeth H Jones on 4/9/2018 11:43:16 AM
Thank you for the steady words, but I'm not worried. When it comes to trade, China has been actually ripping off innovators, and profits. Up until now, our leadership has had so little confidence in us, or they have been in China's pocket, they would cry Uncle. Pres. Trump has been right about everything else so far, and he is willing to stand up for U.S. manufacturing, innovators, etc. There is nothing wrong with China getting a good deal, but it should be reciprocal. We are the largest consumer nation on the planet, and if they want to sell us products, they need to be fair. If they don't, with our new regulation policies and tax laws, manufacturers in China, can come to the U.S. Since there are so many people worried about man made global warming, then by coming here, they will do the environment a favor as well. We have excellent regulations for that and for safety. China is a huge gas and dirty ash pit in their cities because of the corruption, and the the World Trade Organizations insistence on keeping them labeled as an undeveloped country. I wonder how much they are making personally by keeping it that way. China is devious and needs a strong hand. We can tolerate the ups and down. It's just an opportunity to take advantage of the bargains. Think Lucille Ball and a Macy's year end clearance sale. It will make it much more interesting.

Paulette Whinnery on 4/9/2018 3:57:35 PM
 

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