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Morning Commentary


By Charles Payne, CEO & Principal Analyst
5/1/2019 9:13 AM

Filling Gaps

I don’t want to sound too optimistic or manic, but yesterday’s intraday reversal was super impressive.  The Dow Jones Industrial staged a 200-point reversal higher. It bounced just as it appeared. The index was ready to have a serious down session, which would have been fine.

Instead, buyers materialized, and all that pent-up sideline demand revealed itself once again.  Interestingly, the Dow rallied up to the point of a major gap created with a huge down start to the April 24th session. This gap had been filled once before the exchange turned lower. 

That’s not uncommon. The gap of 26,614 was a speed bump yesterday, but it serves now as a potential catalyst.

Beyond the Dow

While it was a solid session for the NYSE listed names in general, the trend of weakening internals for the NASDAQ continued yesterday, as decliners and the down volume dwarfed advancers and the up volume. 

The S&P 500 eked out a plus session, although eight out of the eleven sectors were higher in the session.  As I mentioned in the Afternoon Note, I was most encouraged by Materials, as the market seemed indifferent toward positive comments from Democrats about their White House meeting on infrastructure.

I think President Trump’s natural inclinations are to get a deal done, and not push the idea of public-private partnership. This puts him on the same page as Chuck Schumer and Nancy Pelosi, with respect toward making it more about governmental funding and control. Nonetheless, the $2.0 trillion price tag must be paid, even if it’s with borrowed money, which would be the case if the deal ever happens.

Perhaps the most intriguing action of the session was the lack of action on oil in the wake of the Venezuelan crisis. That tinderbox could blow if Nicolas Maduro doesn’t bow out in the coming days. 

Apparently, he was on the verge of fleeing to Cuba yesterday until Russia convinced him to stay.

I’ll also be spying Consumer Staples (XLP) today to see if that big move was just a knee-jerk retreat or part of a wave of buying and entering this market aimed at value.

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)



That could change today as Apple (AAPL) provides some leadership. The company posted financial results after the closing bell that beat the Street and offered solid guidance while noting positive milestones.

Apple Results

Apple Results












China Developments


This is happening faster than I thought, and it will pick up steam with videos coming online. The company has 390 million subscribers across services and should see 1.0 billion by 2020.  One year ago, services were 16.1% of the total revenue, this quarter it was 19.8% and about one-third gross profits.

The Big Buyback

James Brown sang about the Big Payback.  Well, Tim Cook is crowing about the big buyback, even in the face of negativity, Main Street’s sentiment, and Wall Street wishes that Apple would find better uses for all that cash.

Biggest Stock Buyback Past Five Years

Billion USD


Apple New Buyback Plan

$38.0 Citigroup

$75 Billion

$41.7 Cisco

$44.1 Oracle

$45.5 JP Morgan

$46.8 Wells Fargo

$60.2 Microsoft

$208.6 Apple


Today’s Session

There has been a parade of earnings beats, including a number of WSS positions:

Economy is Sizzling

Breaking News: '275,000 Jobs added to US Economy in April'

ADP Employment Report consensus was for 180,000 jobs created, so this number is monster beat.



All eyes are on the Fed and the end of the FOMC gathering.  Rarely has there been these many questions about the thinking and direction of the Federal Reserve.  I think the Powell Fed has come around to a new way of thinking, and while they won’t take the bait on cutting rates to goose an already strong economy, I do not think the Fed will wreck the economy, and that’s a good compromise.

dear Mr. Payne--you say the main stream media almost drove us into recession in 2018--------------- but what about the great recession in 2008?-----sen. reed & sen. shumer --- one said "---a big bank has no money and the other sen. said a major insurance co is finished (aig) ----what was the effect of that -----i saw a freak-out down & down ----feeding on the down---FOX has the video because i saw it there. i have not heard anyone talk of this exhalation going into the 2007 downturn --that gave us pres. obama ----- thanks for all YOU do.

john on 5/1/2019 6:16:19 PM
Iím happy to say I enjoy seeing Mr.Paine on the tv and radio I listen also. Very proud of him to know where he comes from and to see where he is now. Iím a trucker and I travel thru Alabama and have seen the poverty there. I to was born into poverty and I have worked my way to middle class. Thatís why Charles Payne is my favorite host of all on the Fox Network.I try to never miss his show and love it when he fills in for someone. Itís easy to see that he is a very hard worker like myself. I will always be watching and listening.Thanks.

Gary W Spurling on 5/2/2019 12:19:13 PM

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