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Afternoon Note

Intriguing Session

By Charles Payne, CEO & Principal Analyst
8/6/2019 1:22 PM

This has been an intriguing session thus far as the cloud of angst continues to haunt investors.  Stocks posted a modest bounce at the start of trading after China took steps to lower the Yuan below seven US dollars.  

But the rally stalled after St. Louis Fed President James Bullard hinted at caution with respect to additional accommodation until the Fed can see the impact of all their actions.   There is a sense he’s on board with a rate cut next month, but the street was hoping the self-described “biggest dove” on the Fed would have been more forceful.

Be that as it may, coming into the session Wall Street was modeling for 50 basis point cut next month and 25 basis points cuts in December and next March.

Bullard tripped up the rally, which saw the Dow climb within the shadows of 26,000 (25,946) before slipping.  That’s the bad news. 

The intriguing part of the session is how quickly buyers materialized when the Dow dipped into the red.  There is no doubt the buy on dips crowd is eager.  The question is where buying comes from to take out the intra-day high?

Message of Earning Season

In the most recent Retail Sales report, I pointed out the pace of folks eating outside the home versus buying groceries.  There is a chance we might find last month the former surpassed the latter.  Today, Shake Shack (SHAK) joined other big fast casual names with strong comp store sales.

















I’m reluctant to force long-term buys here, although, if we take out early highs from this morning, folks should consider action with the trading parts of their portfolios. If you are not currently a Hotline subscriber, now is a great time. Click here to get started today. 


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