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Morning Commentary


By Charles Payne, CEO & Principal Analyst
12/26/2019 9:46 AM

Christmas Eve was uneventful, and that was something of a present for investors, considering what happened a year earlier. In fact, December 2019 has been the mirror image of December 2018, where compounding fear triggered major selloffs. We are finishing this year by riding a strong economy that shows few signs of letting up, and a Federal Reserve that is no longer intent on derailing everything because of an old moldy playbook.

Market Breadth was bullish, even though the Dow and the S&P finished slightly lower, while the NASDAQ continued record strings of higher finishes.

Christmas Eve Message of the Market 



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)



When Will Boeing Takeoff?

Passengers, the captain has turned on the seatbelt sign. Please take your seats, as we are experiencing turbulence.

Well, Boeing (BA) has a new captain, CEO David Calhoun, brought in to calm everyone after going through turbulence, which has shaken everyone’s confidence.  Interestingly, to gain respect and signal a real change in corporate culture, David Calhoun is going to have to share embarrassing secrets and information previously withheld from the public and regulators.  

One piece of information that pressured the stock was reported in the New York Times that the company has been simultaneously focused on public relations as it worked on making the 737 Max worthy of regulatory approval.

Several surveys of fliers found 40% would be unwilling to fly the Max, which would make its regulatory approval a moot point if that apprehension remained so elevated.

Always Close The Gap

The NYT article continues to point out tactics being suggested to regain flyer confidence and trust, including offers to rebook flights, have flight attendants or pilots speak with concerned passengers, or handing out 3x5 information cards detailing why the Max is safe.

Some view these actions as forms of coercion while others think it’s just tacky. However, the company must take the position of closing the deal by closing the enormous trust gap. The company earned its new scrutiny, but it can be thrilled there hasn’t been any boycott of other models in the air.

For investors, the question is when the stock will be safe to own again.

Boeing 787 Dreamliner Nightmare:

Shares of Boeing were changing hands at $71.84 when the Dreamliner rolled out, and the shares enjoyed a short-term pop. Then came the delays, which eventually lasted more than three years before the plane was finally ready for passengers on August 26, 2011. The stock rallied that day to close at $62.80.

That wasn’t the only time the stock went on a decade-long decline, but things have changed dramatically since then. Drivers of growth are mostly cemented in place for the next twenty years, driven by a remarkable demand for new commercial planes and maintenance out of the Asia Pacific and the United States.

Portfolio Approach

Today’s Session

I hope everyone had a great Christmas, and I hope most of you are taking the rest of the week off. 

The major indices are in the green again today. The volume should be light, and the actions should be uneventful, although that would be rare for any session in 2019. 

Retail Hot

Ho Ho Ho.  Looks like it wasn’t just Santa in the gift giving mood.  Mastercard Spending Plus released data on the holiday season showing a 3.4% spending increase.  Online sales grew 18.8% from 2018.


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