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Afternoon Note

Under Pressure

By Charles Payne, CEO & Principal Analyst
12/27/2018 1:41 PM
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The market didn’t get any relief from the latest consumer confidence report.

December’s confidence headline of128.1, was well below consensus of 133.7, and down from prior month's 136.4 read, which was revised higher. The report is a tale of current reality and optimism, and growing worries about the future. 

Present Condition

Current conditions reported at 171.6, virtually unchanged from the prior month, which means people feel great about jobs and wages.

Expectations

The Expectations Index came at 99.1, down dramatically from 112.3 in November.  It was the second consecutive decline in expectations for the next six months.

The news curiously saw the market initially edge higher, but then it turn decidedly lower.  Beyond today’s session, the report underscores growing anxiety about the next six months. Market gyrations and everything going on in Washington, D.C. added to worries.

The report belies the assumption of out of control consumers that need to be corralled by a slow down in the economy.

https://pbs.twimg.com/media/DvbqRtmX4AAKVwi.jpg:large

I continue to marvel at the fact this report hit its all-time high of 144.7 eighteen years ago.  Stocks, housing and the overall economy has endured sharp declines and rebounded significantly during this period to new highs but our confidence as a nation still hasn’t completely returned. 

The Unknowns

The market is still reacting to the known unknowns, but I’m more concerned with the unknown knowns.

Reports the White House may issue an executive order banning products from Huawei and ZTE are getting more attention than he announcement China will remove tariffs on hundreds of items at beginning of the year, and dozens of IP products next July.

We also know trade officials from the United States will be heading to China in early January as China continues to take major steps toward curtailing forced transfers of technology.

I don’t think the shutdown is impacting the market, but all the battles and investigations in Washington, D.C. only add clouds of unknowns.

My greatest concern; however, is what I don’t know. It could be nothing or it could be the real reason for the sloppy pullback.

For now, the market is oversold. I reiterate, it doesn’t mean it snaps back or can’t go lower, but it does mean you must take care to not to panic here.

 


Comments
if only we could know the unknowns one known though is the glee on the other side of the aisle to bad.

sidney hiller on 12/27/2018 2:00:16 PM
Charles, just read this and saw your interview in FBN with Peter Morici. I believe the election of 2000 was the ultimate beginning of the derisiveness and partisan issues in the USA. Add your 18-Year question on Consumer Confidence not getting back to that level and I think we have our answer. And as you have said repeatedly, the media has been the driver for anyone who hated the election of 2000 outcome forward!

B Edward Conway on 12/27/2018 2:40:46 PM
Charles, you are right on the money again. If anyone reported yesterday's highest dow in HISTORY it was FBN,& FOX. Most people NEVER see a positive sign or ANYTHING president Trump has done Positive for ALL the USA. We live is a NATION where literally almost all main media (EXCEPT FBN, FBN, ) Where the news is meant to destroy president Trump, and break the USA CITIZENS CONFIDENCE, as well as elites willing to lose billions $$ if the can collapse the economy of USA. It is SAD to think. But really seems like Democrats want the ECONOMY to collapse, so the and communist/SOCIALISM can retake &rebuild the USA. It would be a civil war but, definitely not something anybody would want to happen with common SENSE. THANKFULLY, we are Confident that we have ELECTED the right president Trump, and we have stopped by VOTING, a Democrat mass Coup. We are not selling, but have been buying on the extreme firesales like mon. Hope you were able to grab a few shares on vacation. Life is great INVEST long. Thank you Charles PAYNE & FBN for reporting on news, & facts. Thank goodness for president Trump, we are amazed all he has accomplished with literally every other politician trying to stop him. Trump actually donates his salary, Never heard of in politics before. Please Charles remind president Trump borderwall bonds, or of the triple amputee veteran, whom has raised over $14 million dollars in four days, we the people USA CITIZENS WANT THE SOUNDBARRIER/ WALL,FENCE, &are willing to help pay for our borders to be secured .

J on 12/27/2018 3:27:24 PM
Charles: Most of the time my market activity is taking small profits from one company then immediately purchasing another stock with (maybe) more potential. With that I get a message that basically says that I cannot act irrationally and trade again for at least a week for fear that I might be unfairly "manipulating" the market. What is your opinion of my meager 300 share transaction as to manipulating the market compared with the Institutions which trade thousands (both in dollars and shares)? It appears that is what the Institutions are doing during this year-end season by "adjusting" their portfolios to show profits (by programmed selling) and then buying other stocks (or the same), which in my opinion were driven down by the Institutions "programmed" selling and will gain back the profits lost at this year's end? Is this the manifestation of the "volatility" of the market? Why do the Institutions get away with the radical program selling?
Joe

Joe Keefer on 12/27/2018 7:02:33 PM
Joe you are speaking to the choir. I have seen it get worse over the years not better even as it becomes more obvious. In the long run fundamentals will dictate where stocks go but the ease to trigger swift swings is outright manipulation and unfair. CP

Charles Payne on 12/27/2018 7:43:05 PM
 

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