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Morning Commentary

Where Does America Go From Here

By Charles Payne, CEO & Principal Analyst
5/16/2019 9:45 AM
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Today is the day folks, and if you are in NYC, come to my live audience Town Hall today at 2PM.  I think this is the most important discussion facing the nation and will be the central issue voted on in 2020. 

It might seem odd to some that anyone in this country, or even the billions of people around the planet that joined the middle class over the last two decades, would want to replace capitalism.  But there are cracks in the veneer of American style capitalism due in part to corporate greed, short term thinking, and millions stuck at the bottom of the ladder unable to climb higher.  Yet, those that have cleared the hurdles have unlimited upside. 

It’s strange in this period where celebrity and materialism are at their all-time peak, and millennials post fake photos of private planes and other signs of wealth on Instagram, that millennials are said to be ready to shift to socialism.  I’m not taking any of this lightly and you shouldn’t either.  Please watch my special today or come to the studio if you’re in town.

Click the link for more details: https://www.eventbrite.com/e/a-fox-business-special-event-capitalism-vs-socialism-tickets-60833527719

Market Sentiment

Talk about symmetry, the high for the Dow yesterday saw the index up 190 points, and the low saw it down 190 points.  Sellers emerged into the close underscoring the day to day risk that comes from overnight tweets and headlines.

Market breadth improved, however, maybe signaling an inflection in this latest round of anxiety.

NYSE

NASDAQ

Today

Two big earnings names to watch today are Cisco (CSCO) and WalMart (WMT).   Both are indicating higher after posting numbers that impressed investors and also didn’t live up to the fear from experts when this battle was joined last March.

Walmart

Comparable store sales in the United States climbed to the best first quarter level in nine years driven by groceries, home furnishing and pets.

+1.1% Traffic

+2.3% Average Ticket

+3.4% Comparable Sales

Technical View

Years from now, someone will say “sell in May and go away” was smart in 2019, but will not add what’s happening to make this a challenging month for investors. 

It should be noted, stocks were lurching lower before the latest salvos of the trade war. This wsa due in part to the overwhelming success of the market this year, as earnings season passed the halfway mark, and some folks began to ring the register.  We actually issued several alerts to take profits early in the month.

Now, the bias is to the downside, and several attempts to reverse the monthly trend have all failed.  Consequently, there has been a series of lower lows and highs.  The Dow needs to take out 26,022 to have a clear shot to 26,500.

Portfolio Approach

I want to put some money to work today – all subscribers should have fresh powder. If you are not currently a Hotline subscriber, click here to get started today.

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