Morning Commentary
Yesterday, the Dow Jones Industrial Average notched its 14th record close of 2018. All the other major equity indices finished in the red, which is worrisome.
Moreover, my concern with market breadth continues to gnaw at me, and it’s getting worse.
There were more losers than winners by a long shot.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
1,177 |
959 |
Decliners |
1,802 |
2,076 |
Market Breadth |
NYSE |
NASDAQ |
New Highs |
43 |
42 |
New Lows |
146 |
135 |
Market Breadth |
NYSE |
NASDAQ |
Up Volume |
1.5 billion |
921 million |
Down Volume |
1.8 billion |
1.4 billion |
Disjointed
The fact is, when the Dow is making new highs but airline stocks are getting hit and tech stocks are struggling and portfolios aren’t looking as rosy, it sends a tinge of anxiety that could feed on itself.
Adding to this anxiety is earnings season, which is right around the corner. Expectations are high as all S&P sectors are expected to see a strong earnings growth. Overall, the index is expected to see a 21.6% increase for Third Quarter 2018 (3Q18).
Keep in mind, corporate America is on a roll –raking in big-time money.
Second Quarter 2018 (2Q18) Financial Results:
Guessing and Adjustments
Guessing the top is an old Wall Street habit that actually increases the higher the market goes. Some of the rotation in the market are adjustments that reflect more optimism for multinational companies after a series of trade wins for the administration.
Year-to-Date
Summation
The market has had a tremendous run; from time to time, it digests gains. While it’s irritating, the disjointed action in the market isn’t unusual. Moreover, keep in mind that while there is an active search for value and a broad market catalyst, the economic backdrop is remarkable.
Trump Economy
Yesterday, Jerome ‘Jay’ Powell made the following observation about the economy: ‘too good to be true.’
He went on to say that the U.S. economy appears to be in the midst of a “remarkably positive” period that is unprecedented in modern history.
That is an amazing observation from someone that is not only aware of the economic history of the United States but arguably is the most powerful person in the world when it comes to the economy.
Did Bezos Save or Kill Capitalism?
Yesterday, Amazon (AMZN) announced it was paying minimum wage for employees, even those working part-time. The news probably reflects two realities.
Retaining workers is difficult even in lower skill-set environments.
Jeff Bezos hears the charge of public sentiment against capitalism, of which he has become a symbol, and some deem more of a problem than those old greedy “robber barons.”
The SPDR S&P Retail ETF Index (XRT) got hammered yesterday, in part to the Amazon news because most cannot afford to pay $15.00 an hour. In the top ten holdings, only two traded higher.
Today’s Session
Equity futures have been higher all morning and gaining strength into the open.
Fed’s Epiphany
Yesterday, it was Federal Reserve Chairman Jerome Powell's observation about the economy being "too good to be true," and unprecedented in modern history.
This morning, in London, it was Charles Evans, President of Chicago Fed, saying the “U.S. economy is firing on all cylinders...I expect this good performance to continue over the next few years."
The Fed sees this economy on fire and keeps promising they will not muck it up. They seem okay with inflation running a little hotter than past Fed policymakers, and they seem to understand the importance of looking out a few years.
This is great news on the economy and for the stock market.
Breaking News
September Job Creation: 230,000 versus Wall Street estimate 180,000
Goods Producing 46,000
Political Capital
I focus so much on good-producing, what I like to call “dirty fingernail” jobs, because it used to be the source of American pride. While there are lots of ways to work hard, the kind of grind and pride that comes with getting your hands dirty, ultimately for the greater good, was something we used to wear as a badge of honor.
On that note, we were also told to kiss goods producing jobs goodbye.
The economic wizards that said President Trump could never get new trade deals, especially with his heavy-handed approach, are now claiming the new NAFTA deal came at significant political capital. That’s bunk, but the fact is, delivering jobs to the heartland creates massive political capital.
Housing has been a glaring weak spot, but there was good news this morning from one of the nation’s largest homebuilders.
Lennar
There is no denying, costs are serious factor, but thus far, it appears not to have hurt sales or orders. On the contrary, overall average selling price increased year to year with the West surging.
LEN 3Q18 Regionals ASP |
2018 |
2017 |
West |
$618,000 |
$500,000 |
East |
$353,000 |
$327,000 |
Central |
$375,000 |
$341,000 |
Other |
$410,000 |
$464,000 |
Total |
$415,000 |
$376,000 |
Comments |
Charles, isi numbers rocked, and sales of new big rigs it s over 43,000, the amzn $15 scam was to starve off unionized workers like whole foods , and to poach new cheap labor for seasonal workers, yet They will get less hrs& no benefits, especially since less hrs a week. So J.B. just burned the native american press again.. Charles what ever happened to the 1 month off with pay for the Muslim workers at AMAZON??? CANT FIND ONE ARTICLE ON IF THEY GOT their social justice warrior to get their rights for paid time off on for or in their religious world beliefs . Please Charles PAYNE investigate POST reply. Always #1 Charles Payne & FBN. THANK YOU CHARLES PAYNE, FBN. THANK YOU PRESIDENT TRUMP. WE ARE ALL 100% BEHIND YOU & SUPPORTING YOU. J on 10/3/2018 11:07:51 AM |
Tweet |
4/26/2024 7:39 AM | BIG TECH STEPS UP |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
4/17/2024 9:37 AM | POWELL STILL WANTS TO HELP |
4/16/2024 1:35 PM | Muted |
4/16/2024 9:42 AM | FEAR ARRIVES |
4/15/2024 1:17 PM | Making a Statement |
4/15/2024 9:45 AM | Equal Opportunity Drubbing |
4/12/2024 1:37 PM | Pressure Overall |
4/12/2024 9:42 AM | WHO YA GONNA CALL? |
4/11/2024 1:38 PM | No Urgency |
4/11/2024 9:27 AM | Tough Sledding |
4/10/2024 1:22 PM | Hang In There |
4/10/2024 9:51 AM | HERE COMES THE LATEST RATIONALE FOR PERSISTENT INFLATION |
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