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Morning Commentary

Against the Grain

By Charles Payne, CEO & Principal Analyst
10/28/2019 9:37 AM

Although major indices came up short on hitting new record levels on Friday there was strong rotation out of safe haven sectors (consumer staples, real estate and utilities) into momentum and growth technology and communication services.  There was also a lot of buying or perceived value, as participants are hoping for laggards to outperform.

Professional money mangers are really in a pickle and while good old-fashioned window dressing might fool some folks, they need to go against the grain to explain performance. They could blame trade wars and mean tweets, but their investors can’t retire on those kinds of lame excuses.

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)




Stocks to Watch

Tiffany & Co (TIF) confirms it has received an unsolicited, non-binding proposal from LMVH Moet Hennessy – Louis Vuitton to acquire Tiffany for $120 per share in cash (closed on Friday at 98.55)

Note: stock is indicating at $128, suggesting a higher bid or bidding war. The most important from this news is that this reflects the strength of the American consumer, which Tiffany has missed with old designs and selling techniques.

The United States continues to mint millionaires at a blistering pace. The fact of the matter is demand for LV products, which is being driven by pop culture.

Investing Lessons

Someone knew an offer was coming.  On Friday shares of TIF traded 3.7 million shares almost double the average daily volume.  I haven’t seen news telegraphed like this in a long time.  90% of all news is leaked ahead of time in my opinion, but there are smarter ways for insiders to take advantage than blatantly buying stocks.


Big Money Managers Caught Flatfooted as Money Manager Survey Showed enormous bearishness on October 15.

Today’s Session
Microsoft is higher on a huge Department of Defense contract.

President Trump echoes reports out of China’s media that suggest Phase One is just about done and will certainly be ready for the APAC meeting next month.


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