WHAT’S POWERING STEALTH RALLY?

There have been some peculiar sessions that closed over the last two weeks, and yesterday was the latest. Under pressure for most of the session, the market staged a strong move into the closing bell. Stocks seemed to take their lead from the 10-year yield, which rallied more than 5.0% and has now rallied 28 basis points (bps) off the September 4^th low to 1.744. The 2-year yield is just 1.688.

The Dow and S&P closed at the high of the session, and other big-equity indices closed near their intra-day high point.

• Dow Jones Industrial Average rallied almost 200 points to close at 26,909
• S&P 500 closed at 2,979
• NASDAQ Composite closed at 8,084, just missing the high of 8,086, but above the opening print of 8,049

Internals Impress

As impressive as the close was for the market, the internals were even more ebullient as the market breadth was overwhelmingly positive.

Market Breadth	NYSE	NASDAQ
New Highs	1,712	2,006
New Lows	1,218	1,128
New Highs	82	48
New Lows	10	42
Up Volume	2.83 billion	1.45 billion
Down Volume	1.54 billion	910 million

Does Market Smell a Deal?

Over the last few days, there has been an intriguing mix of poor economic data and overtures from China, which lends hope to the notion there could be good news on the way. 

Wall Street doesn’t expect a deal before the election, which would make positive news even more impactful.

These overtures include removing foreign investment restrictions and an offer for an increase in agriculture buys. The State Administration of Foreign Exchange (SAFE) announced it removed the $300 billion overall cap on overseas purchases of Chinese stocks and bonds.

It should be noted that only $111 billion in funds have been used in such purchases through August 30, so it’s unlikely there is pent-up demand. That said, even symbolic overtures should be considered an olive branch these days. Coupled with pulling the extradition rule in Hong Kong and agreeing to meet with the U.S. on trade, it’s compelling.

I get there was news and a big event in the case of Apple (AAPL), but I don’t think cheap iPhones moved those shares. There is accumulation, and I think it has everything to do with potential positive news.

• Boeing (BA): +3.0%
• Caterpillar (CAT): +2.4%
• John Deere (DE): +3.6%
• Apple (AAPL): +2.2%

Everyone’s Eating Better

"And I'm eating, but I'm still thirsty"

-Kanye West

There’s more evidence the same tide lifts all ships as we got Household Income & Poverty data for 2018 from the Census Bureau. Income distribution saw a greater share of overall income increase in the bottom two quintiles while declining in wealthier quintiles.

Income

Median income $63,179 +0.9%

• White: $70,642 +1.1%
• Black: $41,361 +2.6%
• Asian: $87,194 +4.6%
• Hispanic: $51,450 +0.1%

Real median earnings: $40,247 +3.45

Share of Aggregate Income by Percentile

• Lowest: 3.1% from 3.0% +0.6%
• Second: 8.3% from 8.1% +2.3%
• Third: 14.1% from 14.0% -0.1%
• Fourth: 22.6% from 22.6% -0.6%
• Highest: 52.0% from 52.3% -0.2%

Full time workers: +2.3 million

• Men: 700,000
• Women: 1,600,000

Female to Male Earnings Ratio: 81.6%

Poverty

Americans in Poverty: -1.4 million to 38.1 million

Poverty Rate: 11.8% from 12.3%

• White: 8.1% -0.4%
• Black: 20.8% -0.9%
• Asian: 10.1% +0.4%
• Hispanic: 17.6% -0.8%

The glaring disappointment in the report saw two million increases in Americans without health insurance, resulting in 8.5% of the population without coverage, up from 7.9% in 2017.

At some point during this morning, take some time to remember the events of September 11, 2001, which changed our world forever. 

Say thanks and shake the hand of a first responder.

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

Comments

Someone pointed out that the drop in health insurance coverage was mainly due to younger people no longer being required to have Mandatory insurance. Sounds reasonable. SyG on 9/11/2019 12:30:53 PM

Health insurance coverage numbers are a meaningless joke. Obamadontcare insurance was mostly just catastrophic insurance, meaning ii would pay nothing until after you spent all your food and rent budget on medical care, leaving you broke and homeless in the process. If you wanted to fix your child’s a broken arm or get her antibiotics for an infection, it paid nothing. The statistic we need to see is how many people in that bottom quintile have a program in place to pay for a doctor and get meds when they are too sick to go to work or school. There are loads of people with Obamadontcare policies who can’t afford that care. Bob G on 9/12/2019 9:24:30 AM

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