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Afternoon Note

Heavy Weights Not Hurting

By Charles Payne, CEO & Principal Analyst
10/23/2019 1:43 PM

Considering the earnings news from some heavy weights, the markets have performed well. Texas Instrument’s (TXN) miss is dragging down semiconductors and Caterpillar (CAT) is weighing down Industrials.  News from Nike (NKE) that CEO John Donahoe is stepping down in January and will be replaced by Bill McDermott is taking the stock down over 2% and hurting Consumer Discretionary. 

Mark Zuckerberg, CEO of Facebook (FB), is testifying about its Libra (cryptocurrency) project on Capitol Hill today. The stock is clawing back some of its losses from yesterday, and it is up over 1%. Apple (AAPL) is also performing well after another price upgrade, this time from Morgan Stanley, from $247 to $289.   

S&P 500 Index



Communication Services (XLC)



Consumer Discretionary (XLY)



Consumer Staples (XLP)



Energy (XLE)



Financials (XLF)



Health Care (XLV)



Industrials (XLI)



Materials (XLB)



Real Estate (XLRE)



Technology (XLK)



Utilities (XLU)



On the housing front, the MBA Mortgage Applications Index declined 11.9% for the week ending October 19, as an uptick in interest rate hurt refinancing and purchase applications. 

"Interest rates continue to be volatile, with Brexit votes and ongoing trade negotiations swinging rates higher or lower on any given day. Last week, mortgage rates jumped 10 basis points and were above 4 percent for the first time since September," said Mike Fratantoni, MBA Senior Vice President and Chief Economist. "The increase in mortgage rates caused refinance applications to drop 17 percent, and by more than 20 percent for conventional loans. Borrowers with larger loans are the most sensitive to rate changes, and with rates climbing higher last week, the average size of a refinance loan application fell to its lowest level this year.”

Speaking of rates, U.S. Treasuries are up today, with the 2 year at 1.57% and the benchmark 10 year at 1.75%.   

Meanwhile, the FHFA Housing Price Index, which measures the prices of single-family homes, rose 0.2% in August after an unrevised 0.4% increase in July. Year over year, housing prices were up 4.6%. 


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