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Morning Commentary


By Charles Payne, CEO & Principal Analyst
12/23/2019 10:00 AM


Image result for killer whales leaping of waterComing into the week, everyone’s talking about a Santa Claus Rally, defined as an up period for the stock market that starts with the last week of the year to the end of the second week in the New Year.  Without a doubt, market bias is overwhelming to the upside, and there is a great urgency to get in the mix.

More than likely, if we get the Santa Rally, it won’t be reindeer, but those killer whale momentum stocks known as FANG (Facebook, Apple, Netflix, and Google). They led the way last week, lifting the Consumer Discretionary well above all other sectors. Netflix (NFLX) was the bigger winner, followed by Facebook (FB).

S&P 500 Index Five Day Performance



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)



Today, we get the latest read on durable goods. More importantly for the market, it will tell us about nondefense capital goods orders, excluding aircraft business investment. The October number beat Wall Street consensus, rebounding off the second lowest read of 2019. The Street is looking for a -0.3% decline for November.

FRED Graph

New Home sales results are also being released today, and while this is smaller than existing homes, we should get clues from pricing on the overall housing trend

Portfolio Approach

We had lots of update lots of activity last week.  If you are not a subscriber to our Hotline Service, there has never been a better time to get started.  Click here to subscribe today.

Today’s Session

The major indices are in the green, albeit slightly.   Boeing’s (BA) CEO, Dennis Muilenburg, is resigning and the current Chairman David Calhoun will replace him effective January 13.  Boeing plans to work hard to restore and repair relationships with is customers, regulators, and shareholders.  BA is up over $10 on the news.

In economic news, Durable Goods orders dropped 2% from the prior month, and October was revised up 0.2%.  Excluding transportation, durable goods were unchanged, as projected, and October was revised higher by 0.3%. A proxy for business spending, Non-defense capital goods, excluding aircraft, increased 0.1%, and year over year is up 0.7%.

New Orders



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