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Afternoon Note

Hanging on to Gains

By Charles Payne, CEO & Principal Analyst
1/8/2019 1:45 PM
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The market has struggled to hold on to gains as investors are on tenterhooks awaiting word on the U.S. – China trade talk.  Early scuttlebutt suggests there will be greater effort to communicate positive signs after the meeting, but there have been reports things aren’t going so swell.

Then, there’s the decline in semiconductors after Goldman suggested the first half of 2019 would be difficult for chips, singling out specific concern for Nvidia (NVDA).  For a split second, weakness in chips and tech took the NASDAQ Composite into the red.

SOXX

Transportation

Union Pacific (UNP) is surging more than 8% higher on management news that it has hired Jim Vena as the new Chief Operating Officer effective January 14.  This has investors cheering and helping the Dow Jones Transportation index higher.

Boeing (BA) is enjoying a strong session as fourth quarter commercial deliveries climbed to 238 from 209 a year earlier, lifting full year deliveries to a record 806, +4% year over year. 

The combination of Union Pacific and Boeing is setting the pace for the S&P Industrial Sector, but the best performing sector is Communication Services led by video game stocks Activision (ATVI) and Take Two (TTWO).

Rest of the Day

It’s all about news out of China.  There is a chance for a 300 to 400-point session in either direction based on the interpretation of the news. I remain very optimistic.  China has made offers and concession never made before, and while I think President Trump will push hard for the best deal positive, as this is the last chance to address this issue. I think he will accept victory sometime in the next three months.


 

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