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Morning Commentary


By Charles Payne, CEO & Principal Analyst
7/3/2019 9:38 AM

Happy Birthday, America

Yesterday, it was another late spurt for the market that saw the three major indices close at the high of the session, and the S&P 500 notch another record. That’s the third in nine sessions - 87 since President Trump and 96 since the November 2016 election. The Russell 2000 was hit once again. I’m not sure what’s happening there, but it’s not a proxy for the domestic economy.

What’s amazing is just like stocks kind of waltzed higher into the close, the entire year has had a stealth-like feeling that has masked magnificence. Let’s not forget about the doom and gloom of May, which began with Fed Powell dashing rate cut hopes, and then more tariffs angst. The naysayers have been calling for a correction through it all and have led a lot of investors astray.

But what is the message of the market? Well, it is a welcoming message that there is more to the stock market than six momentum names. However, don’t count those names out, either.

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)



It’s hard to fathom there could be a repeat performance in the second half of the year; and yet, it is occurring without fanfare or even recognition. The financial press has been adamantly against this rally and wonders out loud each day when the crash is going to happen.

The great news for individual investors is professional money-managers have been so far behind the curve, they must make moves quickly. And the more they put their billions to work, the more others will be forced to follow. By the end of the week, we’ll have a better handle on whether they can hold out or not.  

Meanwhile, shorts continue to get hammered and once again, Tesla (TSLA) will smack them around. The company announced the delivery of 95,200 vehicles, sending shares up $16.00.   The stock is still well below its all-time high, and shorts in the stock have a cult-like belief. This stock should be changing hands in the single digits.

Portfolio Approach

We don’t have much cash. So, we are reexamining positions, as we consider raising cash to fund new ideas.

Communication Services

Consumer Discretionary

Consumer Staples












Real Estate











Today’s Session

Equity futures have pointed higher all morning but haven’t budged for hours, even as a wave of economic data releases have produced a wide array of outcomes.

Initial Jobless Claims

Claims came in at 221,000 down 8,000 from revised 229,000 week earlier.  This underscores the tightness of the labor market, which was also reflected in this morning’s ADP Employment Report.

ADP Employment Report

Another big miss and ominous sign before the government release on Friday.  The weakness in small businesses continues to stand out.  I’ll go into greater detail on Friday morning.

International Trade

The U.S. trade deficit widened to $55.5 billion, which is larger than expected, after April was revised to $51.2 billion from original read of $50.7 billion.

Interestingly, Mexico continues to surge as a trading partner, and as our deficit with our southern neighbor climbed to a record.  Therefore, the threat of tariffs was so effective, and Mexico has gone beyond promises to help curb the immigration crisis.

US Trade May 2019

















US Biggest Exports in May

There will be no afternoon note.  Enjoy your day, and never forget, we are blessed to live in the greatest country in the world.

Charles--- Have a Great Independence Day-- I will be driving a 1945 Willys MB--in a local parade. The vehicle dubbed "THE GREAT AMERICAN WONDER" by the WW-2 Vets.

john on 7/3/2019 10:36:50 AM
correction---" ALL AMERICAN WONDER" { great is good all is better}

john on 7/3/2019 11:22:23 AM

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