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Morning Commentary

LATE STUMBLE HIGHLIGHTS NEAR-TERM STRUGGLES

By Charles Payne, CEO & Principal Analyst
3/6/2019 9:22 AM
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Just as the market gained some momentum to the upside on Tuesday, all the major indices turned lower and finished in the red.

The declines weren’t huge, but the market breadth is becoming more worrisome. There were more decliners than advancers, and the down volume was greater than the up volume, but what caught my eye was the surge in 52-week lows. There were only 80 new highs on the NYSE and only 37 winners on the NASDAQ.

S&P 500 Index

-0.11%

Communication Services (XLC)

+0.63%

Consumer Discretionary (XLY)

+0.25%

Consumer Staples (XLP)

-0.07%

Energy (XLE)

-0.33%

Financials (XLF)

-0.38%

Health Care (XLV)

-0.05%

Industrials (XLI)

-0.64%

Materials (XLB)

-0.47%

Real Estate (XLRE)

+0.29%

Technology (XLK)

-0.30%

Utilities (XLU)

-0.12%

Momentum is Back

As I mentioned yesterday, investors are pouring back into household momentum names that have somehow morphed into safe havens in times of uncertainty:

Those names, along with Twitter, pushed Communication Services to the best performing sector of the session. The sector is at a major resistance point, up to 47. Through there, the stock could take off like the good old days when momentum investors didn’t ask questions but just hopped on board for the ride.

XLC Communication Services

We’ll get more on retail and the state of American consumers with earnings results from several names that have been in trouble in recent years:

I am also looking forward to the ADP jobs report.

Opioid Crisis Deadly Toll

Yesterday, we learned deaths from suicides in America hit an all-time record last year.

They have become intertwined with growing scourges on the nation, and it has become the biggest combined humanitarian crisis of our times.

Opioid and Suicides

Last year, U.S. life expectancy declined for the third year in a row, weighed down by the twin scourges.

These issues can affect anyone in any demographics, including the very rich. The co-founder of Square, Tristan O’Tierney, passed away on Feb 23rd at the age of 35.  His mother, Pamela Tierney said: “I don’t have an official diagnosis…it was probably related to his addiction.” Those that followed Tristan on social media probably were not surprised.

Tristan O’Tierney

‏ @tristan

As some of you may know, I’ve been battling with addiction for these past few years. With some success. A lot of failure too though. Square set me up for life, but this disease has taken…

Pain & Suffering

The pain and suffering of families, friends, and communities could never be quantified. However, the economic toll has been enormous and it’s climbing.

The old answers aren’t working as despair mounts. I continue to press this topic because nations continue to look the other way. I know improved economic conditions will help stem the tide, but it won’t be instantaneous. It’s just another reason for the economic Renaissance to continue, especially in the heartland.

Portfolio Approach

We asked subscribers to take profits in several sectors, made some bolding changes and have increased cash to 10%.  If you have any questions, call your account representative or email research@wstreet.com.

Communication Services

1

Consumer Discretionary

4

Consumer Staples

1

Energy

1

Financials

1

Healthcare

2

Industrial

3

Materials

3

Real Estate

0

Technology

2

Utilities

0

Cash

2

 

Today’s Session

The ADP report for February saw an increase of 183,000 jobs.  We will have more in the afternoon note, but highlights include:

Also on the economic front, the U.S. monthly international trade deficit increased to $59.8 billion in December from a revised $50.3 billion in November, as imports increased, and exports decreased.  The goods deficit was up $9.0 billion in December to $81.5 billion, while the services surplus declined $0.5 billion in December to $21.8 billion. 

The futures are pointing to a relatively flat open. 

 

 


Comments
I like your detail in both the analysis and the direction to be taken

wayne Flanagan on 3/6/2019 2:57:12 PM
 

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