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Afternoon Note

Oil Slides

By Charles Payne, CEO & Principal Analyst
9/17/2019 1:48 PM

What a difference a day makes in the energy patch, as stocks in that sector that were up big yesterday, especially those with huge short interest, are giving some of those gains back.  Appears the Saudi production could be back to normal in a couple of weeks, much sooner than originally anticipated. As such, energy is down almost 1%, with WTI trading down about 5% to around $60 a barrel.   

The major indices are mixed with the Dow and S&P down, and the Nasdaq now in the green.  Consumer Staples and Utilities are leading the way higher.

S&P 500 Index

 

-2.11%

Communication Services (XLC)

 

-0.31%

Consumer Discretionary (XLY)

+0.13%

 

Consumer Staples (XLP)

+0.59%

 

Energy (XLE)

 

-0.87%

Financials (XLF)

 

-0.56%

Health Care (XLV)

+0.09%

 

Industrials (XLI)

 

-0.47%

Materials (XLB)

 

-1.53%

Real Estate (XLRE)

+0.02%

 

Technology (XLK)

 

-0.05%

Utilities (XLU)

+0.75%

 
 

The two-day FOMC meeting is underway. Most believe that the Fed will cut rates tomorrow, however the probability of no change in rates is up to 41.2% from last week’s 7.7%.  Interest rates have been on the rise despite the anticipated cut, with the 10-year trading around 1.8%.  The New York Fed will begin to repurchase up to $75 billion in assets to attempt to get a handle on its fed funds rate. The overnight rate hit the upper end of the Fed’s 2-2.25% target. 

On the housing front, September Home Builder sentiment index from NAHB (National Association of Home Builders) came in at 68, up 1 point and beating expectations (66), and August was also revised higher from 66 to 67.  This was the best read of the year as mortgage interest rates declined in August. 

There were some concerns among homebuilders growing related to the U.S. China trade dispute and concerns that a slowing in manufacturing could hinder certain parts of the country.


 

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