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Market Commentary

Market Speed Bumps

By Charles Payne, CEO & Principal Analyst
4/20/2018 12:54 PM
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The markets are hitting a variety of speed bumps in today’s session.

Could there be some rotation?

This is an interesting session as a perennial loser is enjoying a very good session and a perennial winner is plunging and taking its sector and the broader market along for the ride.  GE is being rewarded for beating on lower expectations and not delivering any unexpected bad news, while Apple continues to feel the heat after a warning from Taiwan Semiconductor yesterday.

Today, a Morgan Stanley analyst voiced caution over the current quarter on I-phone sales and lowered her share price target to $200 from $203.  New Morgan Stanley I-Phone metrics:

Note: Wall Street consensus for the quarter sees revenue at $61.08 billion and earnings per share $2.69.

I think it’s early to do extensive bargain hunting in severely beaten down names.  I wouldn’t talk anyone out of buying GE, but I’m much more interested in Apple getting cheaper; although, not sure I would add to my own position in my retirement account.

Crude has pulled back a little after President Trump tweeted “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”  WTI was trading lower after the news, but it has regained half of its losses and is trading down only .13% to $68.24.   Energy is among the weakest sectors today.

Financials are having a good day and are among the sectors leading.  Wells Fargo (WFC) agreed to pay $1 billion to settle the Office of the Comptroller of the Currency (OCC) and Consumer Financial Protection Bureau (CFPB) probe over loan abuses in its auto and mortgage lending businesses and its failures to catch and prevent problems, including improper charges to consumers.  This is the largest fine that has been levied against a bank from the Trump administration.  Shares of WFC are up over 2% on the news. Hopefully, WFC can now put this overhang behind them and move the business forward.

The Washington Post has gotten back in the fray today, releasing a report that the Democratic Party has filed a lawsuit alleging Russia, the Trump campaign and WikiLeaks conspired to disrupt the 2016 campaign and tilt the election in favor of Donald Trump.   Foreign countries usually have sovereign immunity from most U.S. lawsuits.  The complaint argues that Russia is not immune because its hack constituted a trespass on the Democratic Party’s private property.   The lawsuit seeks millions of dollars and does not name President Trump as a defendant; although, it does target various aides included Donald Trump Jr.  The Dow Jones Industrial Average dropped approximately 200 points after the release.       

At midday, all the major indices are in the red.  The greenback has strengthened, and the index is up 0.5%.   Decliners are leading advancers almost 2-1 on the NYSE to 1926/872 and on the NYSE 1485/1051. 

 Have a great weekend


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