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Afternoon Note

Headwinds & Tailwinds

By Charles Payne, CEO & Principal Analyst
2/12/2019 1:03 PM
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The market began the session with a spring in its step as reports of a deal to avert a government shutdown had been reached and was expected to be signed by President Trump. That’s one potential headwind we can check off.  Now investors anxiously await the next big headline headwind from negotiations out of China.  If there is substantial progress, and tariffs are delayed again, forget about pep in the step.  The market will shift into full swagger mode.

There is the notion that success begets success and a lot of sideline money must decide whether to join the party or rationalize missing another rally.  This is especially true for professional money managers and those masters of the universe on Wall Street that have blown it against every backdrop, from rip-roaring rally to dazzling freefall to pedestrian stroll, as the market moved into wait-and-see mode.

Additional pressure for would-be buyers is the tailwinds that comes with 7.3 million job openings paced by higher paying jobs in construction, business and trade.

Next Big Breakout

The Dow Jones Industrial Average held the 200-day moving average, but it hasn’t snapped the series of lower highs since peaking October 3, 2018.  The index can reverse that trend with close above 25,411.

Right now, the S&P 500 and NASDAQ Composite are on the cusp of making that reversal today.

Investors are wading back into the market, focused on value shifting out of real estate into materials and financials.

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)





Can we check off a potential 2nd government shutdown so easily?
The President asked for 5.7B and is getting 1.3B for 55miles - why did we have the 1st shutdown then??? This is a sick joke on the voters from Congress.

dipak patnaik on 2/12/2019 1:31:23 PM
Charles, is president Trump just going to seize ALL el Chapo's assets, and use the funds to BUILD the WALL? El Chapo 's billions IS "MEXICO PAYS FOR THE WALL!!" We trust and thank president Trump, & thank you Charles PAYNE & FBN. Life is great INVEST long.

J on 2/12/2019 2:18:44 PM
I disagree on the 'swagger' notion... It is obvious that the USA is has returned to the position as the only super power with all other nations dependent on the US's success to ride on its coat-tails... This last trade war has proven this without a doubt, with the chinese economy floundering at the mercy of trade being blocked from the USA... This is no surprise because only free market economies gain real prosperity not setting up shop with forced, free labor that the chinese have been able to get away with for decades now... Xi will have internal fights on his hand with the hard-liners that have re-surged and encouraged all the latest abuses to the citizens' human rights and extortion of intellectual property from foreigners for access to their huge consumer markets, this is an existential threat to all emerging markets as the chinese are expanding into the poorer tyrannical regimes in Africa and Asia... As I keep saying, like gravity, you ignore Capitalism at your own peril...

Andrew B Newallo on 2/13/2019 11:01:05 AM

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