Wall Street Strategies
Hello! Sign in or Register


Morning Commentary

SEEKING VALUE & YIELD  

By Charles Payne, CEO & Principal Analyst
9/10/2019 9:40 AM

Call it cautious optimism or just investors shaken up from August gyrations looking to be in the market (with less drama), even if it potentially means less return on investment. The rotation that began last week earnestly picked up yesterday with investors fleeing high-beta names looking for a combination of low price-to-earnings (P/E) ratio and yield.

That combination often occurs as a result of stocks underperforming, sending share prices lower and yields higher.  This makes Energy (XLE) very attractive. The sector climbed 2.00%, aided with another move higher in West Texas Intermediate (WTI).

Financials also looked enticing for those looking for “cheap” stocks (based on P/E) ratio and yield.

On the other end of the spectrum is the notion that safe havens have gotten too expensive. Despite their fat yields, Real Estate and Utilities continue to lurch lower.

Sector

PE Ratio

Yield

% Change

XLC

18.78

0.79%

+0.32

XLY

21.03

1.27%

+0.38

XLP

20.47

2.63%

-0.21

XLE

17.00

3.74%

+2.00

XLF

12.26

2.00%

+1.53

XLV

15.43

1.64%

-0.92

XLI

17.25

2.03%

+0.30

XLB

18.31

2.10%

-0.52

XLRE

43.25

3.12%

-0.75

XLK

20.55

1.37%

-0.75

XLU

20.20

2.94%

-0.49

Attack of the AGs

Communication Services sector eked out a gain yesterday, but it was led by Trip Advisor (TRIP) and News Corp (NWS).  Facebook (FB) and Alphabet (GOOG) performed admirably, considering both companies are circling the wagons these days.

Yesterday, Attorney Generals (AGs) from 48 states, Puerto Rico and Washington, D.C. gathered in the nation’s capital to announce an investigation into possible antitrust violations at Google, the search giant. It sounds like a fishing expedition more than anything akin to investigating illegal activity.

One of the AGs said there wasn’t a sense of what the conclusion would be because “you gotta find liability before you get to remedies.”  Essentially, size is the problem, and increased advertising costs lead to increased consumer costs.

It appears they are not only pushing on the string, but they are also connecting too many dots. Anyway, this free-for-all is just getting started and could go well beyond the advertising part of the business.

Momentum darlings are off a lot in the past couple of months, and soon they could be the hot value investments.

Approach

Communication Services

Consumer Discretionary

Consumer Staples

1

2

1

Energy

Financials

Healthcare

1

1

2

Industrial

Materials

Real Estate

3

2

1

Technology

Utilities

Cash

3

0

3

 
 

Today’s Session

Looks like it will be a flat to slightly lower start to trading this morning.  The most intriguing, even infuriating, news of the morning is how the media’s over hyping of recession is influencing polls.  There is so much amazing news people are not hearing.  You have to ask how the media can be so biased as to increase the risk of recession by fanning the flames and ignoring or severely under reporting real time stuff- great stuff.

The Chief Economists at NFIB shares those sentiments:

August 2019 Report:

Small Business Economy Remains Steady,

Despite Doom and Gloom Narrative That’s Hampering Expectations

https://www.nfib.com/surveys/small-business-economic-trends/

The NFIB Small Business Optimism Index fell 1.6 points to 103.1, remaining within the top 15 percent of readings.

“In spite of the success we continue to see on Main Street, the manic predictions of recession are having a psychological effect and creating uncertainty for small business owners throughout the country,” said NFIB President and CEO Juanita D. Duggan. “Small business owners continue to invest, grow, and hire at historically high levels, and we see no indication of a coming recession.”

Small Business Owners’ Difficulty Finding Qualified Workers Reaches Survey High in August

Twenty-seven percent ranked finding qualified workers as their No. 1 business problem.

Overall, 64 percent of owners surveyed said they hired or tried to hire people in August, a slight increase from the month before. Of those, 89 percent reported finding few, if any, qualified applicants.

Thirty-five percent of all owners reported job openings they could not fill in the period, down four points from July. Forty-nine percent had openings in construction, while 42 percent had unfilled positions in manufacturing. Thirty-five percent or more in all industry groups expect financial services and professional services reported unfilled openings.

Thirty-three percent have job openings for skilled workers, and 13 percent have openings for unskilled workers.

Owners citing “few or no qualified applicants”

A net 29 percent reported raising compensation and a net 19 percent plan to raise compensation in the coming months.  Fourteen percent of all firms reported using temporary workers.   


Comments
I personally like to see natural rotation like this. In my opinion it consolidates valuations and lessens risk as whole in equities. Days like today seem more rational and for me personally more bullish.

Ed P on 9/10/2019 6:07:46 PM
I agree with you. In fact I loved the market for the first few months when 450 stocks were higher although that started giving some investors false confidence. There is more to the market than six names repeated over and over again in financial media. CP

Charles Payne on 9/10/2019 6:15:06 PM
“15 Million Votes Are on the line in 2020 Elections … could be shifted” (from 26:20m to 29:20m) #GoogleManipulation
https://youtu.be/R9V6WoB_XiY (21m) September 08, 2019 - Dr. Robert Epstein on Google's ability to affect the outcome of elections. He is the Senior research psychologist at the American Institute for Behavioral Research and Technology [and] is the only one in the world doing this research. ||| His research paper (link below) is the most downloaded paper (200K times _ top 1% of all papers downloaded of all scientific papers in all fields) was published in The Proceedings Of The National Academy Of Sciences, the one of the top scientific journals in the world (@ 38:40m). ||| (@ 11:57m subliminal manipulation)
"THE SEARCH ENGINE MANIPULATION EFFECT (SEME) AND ITS POSSIBLE IMPACT ON THE OUTCOMES OF ELECTIONS" pdf
[PDF] via Bing: https://www.pnas.org/content/pnas/112/33/E4512.full.pdf?
[GoogleSearch American Institute for Behavioral Research and Technology]: https://www.google.com/search?q=AMERICAN+INSTITUTE+For+BEHAVIORAL+RESEARCH+And+TECHNOLOGY

Very Important video with lots of information and well worth your time.
Interfering with elections are Actions of Sedition = TREASON
https://www.google.com/search?q=SEDITION
[Manipulating Elections IS Sedition = TREASON and requires/demands Execution]


Robert Fay on 9/10/2019 7:38:32 PM
 

Add Your Comment


Submitted comments are subject to moderation before posting.


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Privacy Policy | Terms of Use |
All Rights Reserved.