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Morning Commentary

LOOKING FOR THE OOMPH

By Charles Payne, CEO & Principal Analyst
10/1/2019 9:29 AM

It was a pretty good Monday session that saw the same good news/bad news quandary.

Good News: Resolve

Buyers continue to show on dips, as few sessions see major indices close at session lows. On the contrary, last Friday, investors had a large enough excuse to sell stocks into the weekend, but buyers materialized in the waning moments of the session.

Bad News: Oomph

The lack of oomph continues to haunt the market, which has meandered in the shadows of the all-time high for weeks, and now can’t find a way to get over the hump. Yesterday, the market shook off anxiety and a big miss on the Chicago Purchasing Managers Index (PMI). It looked as if the Dow Jones Industrial Average could rally 200 points. The index and overall market faded into the close.

Buying was evenly distributed with Technology leading the way.

S&P 500 Index

+0.50%

 

Communication Services (XLC)

+0.51%

 

Consumer Discretionary (XLY)

+0.86%

 

Consumer Staples (XLP)

+0.49%

 

Energy (XLE)

 

-0.72%

Financials (XLF)

 

-0.25%

Health Care (XLV)

+0.90%

 

Industrials (XLI)

+0.14%

 

Materials (XLB)

+0.85%

 

Real Estate (XLRE)

+0.13%

 

Technology (XLK)

+1.05%

 

Utilities (XLU)

+0.06%

 

 

The Tables Have Turned: Value is Momentum and Momentum is Value

Home Sweet Home

Homebuilders have become a momentum juggernaut, driving the U.S. Home Construction Index +44.2% year-to-date, and appear to have a lot more room to the upside.

ITB Index

Chipping Away

An index that’s changing hands at a forward price-to-earnings (forward P/E) ratio of 44.9% isn’t exactly a value, but semiconductors have been in enough of a rut lately. Some are wondering if they are oversold.

Yesterday, two separate analysts, both citing trips to Asia, voiced cautious optimism that chip demand is better than many believe, and trade developments could have an immediate positive impact.

Philadelphia Semiconductor Index

Parade of the Penguins

Today sees the start of another week of jawboning from Federal Reserve officials. Yesterday in Asia, Charles Evans seemed more open to lower rates, so perhaps he can move the needle. Or perhaps someone else will, as they have had a chance…or two.

Tuesday

Evans

Clarida

Bowman

Wednesday

Barkin

Harken

Williams

Thursday

Evans

Quarles

Mester

Kaplan

Clarida

 

Friday

Rosengren

Bostic

Powell

George

Today's Session

Stocks opened higher as the last quarter of the year kicks off. Financials are leading the way, as yields rose broadly.


 

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