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Afternoon Note

Anxiously Awaiting Fed

By Charles Payne, CEO & Principal Analyst
1/30/2019 1:40 PM

It’s a great session that takes the market closer to the kind of breakout that even bears (those managing money) must participate in, but it still has more work to do to get there.

Tech stocks are up huge on Apple’s (AAPL) coattails, but communication services are barley moving the needle, as investors remain anxious on other high flyers.

I like the action in consumer discretionary names, and industrials are once again being led by airlines.

S&P 500 Index


Communication Services (XLC)


Consumer Discretionary (XLY)


Consumer Staples (XLP)


Energy (XLE)


Financials (XLF)


Health Care (XLV)


Industrials (XLI)


Materials (XLB)


Real Estate (XLRE)


Technology (XLK)


Utilities (XLU)


Investors are also a little anxious when it comes to the Federal Reserve, which concludes its FOMC gathering, then Jay Powell will deliver a live question and answer session that could have major ramifications if he’s too laid back or defensive.

One question will be how the Fed could hold down rates and not hike this year despite the robust jobs market.  This morning ADP posted a monster bear powered by construction and manufacturing jobs.  The manufacturing renaissance has been nothing short of remarkable and a real blessing for the hardest hit American workers in the past couple of decades.

I’m not sure what the Fed will do, but I it’s seems clear Powell & Co loathe to be blamed for derailing the stock market and will need obvious data to justify rate hikes this year.

Meanwhile, when commenting on rate hikes the Fed has evolved:

The Fed should be the assistant surgeon, to the market forces' lead, when it comes to making adjustments to any parameters in the economy...

Andrew B Newallo on 1/30/2019 2:32:13 PM

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