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Afternoon Note

Consumer Still Confident

By Charles Payne, CEO & Principal Analyst
9/27/2019 1:22 PM

The market was making its way higher on mostly better than expected economic data and signs Democrats might be serious when it comes to bringing USMCA to the floor for a vote.  A group of Democrats have given US Trade Representative, Robert Lighthizer, some proposals ostensible to help get the deal passed into law.

Anxiety about missing a big move to the upside shifted abruptly on reports the administration is looking into ways to limit American investments in Chinese companies, including allowing them to list and trade on American exchanges.  There’s $1.2 trillion dollars in more than 150 Chinese companies listed on US exchanges. 

I get the administration is trying to signal that there are additional levers beyond tariffs ahead of the high-level meeting, but such a move would be crazy. On the other hand, there has been growing resentment about the lack of scrutiny of Chinese companies that are listed.  That is a legitimate concern and it got a lot of lawmakers on both sides of the aisle looking for solutions.

Consumer Flushed & Confident

September consumer confidence came in better-than-expected to go with durable goods that beat and personal income that came in line with consensus.

According to the report, there is concern about the global issues from Brexit to the Middle East and slowing China economy. Traffic worries continue to be near highest level.

Consumer Sentiment

United States Consumer Sentiment

NASDAQ Woes

The NASDAQ continues to break down after briefly bouncing back. The index couldn’t break out the July 26 high and now the selling is picking up, led by those monster momentum names.

This morning, JP Morgan came to the defense of Netflix (NFLX), the stock is still lower today. Wells Fargo upped their share price target on Amazon (AMZN), and that stock is lower, too.

If the brakes are applied soon the next big support point is 7,750.

https://www.tradingview.com/x/cr5MjXKR/

This market wants to move higher and some great names are getting cheaper. Anxiety is outweighing fundamentals, which is frustrating but also how opportunities are created.  Just can’t force it but when the turn happens it happens quickly.


 

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