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Afternoon Note

Wait and See

By Charles Payne, CEO & Principal Analyst
6/6/2019 1:31 PM
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It’s been a wait and see kind of market ahead of the jobs report and mixed messages on potential tariffs on Mexico.   I continue to be impressed the market is holding up, albeit in a very tenuous fashion.  Today,  bottom fishers are buying the Energy sector after a massive selloff in crude, which is mostly from the monumental supply glut.

While overall bias has clearly shifted back to the upside, pressure continues in momentum high Beta names.  The NASDAQ has spent most of the session in the red column.

S&P 500 Index

+0.16%

 

Communication Services (XLC)

+0.02%

 

Consumer Discretionary (XLY)

 

-0.16%

Consumer Staples (XLP)

+0.82%

 

Energy (XLE)

+1.44%

 

Financials (XLF)

 

-0.09%

Health Care (XLV)

+0.45%

 

Industrials (XLI)

 

-0.32%

Materials (XLB)

+0.50%

 

Real Estate (XLRE)

 

-0.32%

Technology (XLK)

+0.31%

 

Utilities (XLU)

+0.13%

 

Other than overall angst, the most compelling action today is selling in brick and mortar retail.  It has been a rough patch for these names, but today’s action is a true red flag, as companies with good news are no longer being given the benefit of the doubt.

Signet (SIG) posted robust numbers, and popped at the start of trading, but now the stock is changing hands at the all-time low.  Five Below (FIVE), which has been executing nicely, also saw an early rally fizzle into wide selling and Michaels Stores (MIK) shares are also at an all-time low.   Meanwhile, Stitch Fix (SFIX) shares are up 14% on its big earnings beat.

There are several stocks on the buy list I would love to pounce on, but the mercurial market poses enough risk, even for companies with the best fundamentals.  It’s better to have some cash on hand heading into the big jobs report. If you are not currently a subscriber to our Hotline service, now is a great time.  Click here to get started today. 

 


 

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