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Morning Commentary

Saber Rattling Anxiety

By Charles Payne, CEO & Principal Analyst
1/6/2020 9:32 AM

There have been two sessions in 2020. The first session on Thursday saw stocks surge in jailbreak fashion, as each tick higher forced another fence-sitter to act, which triggered another tick higher. The market picked up steam, and the only thing that stopped major indices from going higher was the closing bell.

On Friday, the market tumbled from a bang that reverberated from Baghdad and around the world, and the drone strike against the world’s most dangerous terrorist. It was great news to rid the world of such a devious mind amid plotting more carnage. Safe Haven Real Estate and Utilities were the only two sectors to finish in the green.

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)



Market commentators took the opportunity to imagine a great war between the United States and Iran (many mused how difficult it would be for America), but that is unlikely to materialize. However, we might move into a period of increased volatility, as the anxiety-filled valuation increases ahead of the earnings season.

Today, the market will open lower on anxiety as saber rattling between the United States and Iran ratcheted louder over the weekend.  There is no way Iran is going to attack anything outside of perhaps military targets, and even then, it would be proxies.  

The market rationale is fine, but I wouldn't panic.  The biggest movers from the news:

This week we get big news, including the latest on employment.  For now, let’s stay on the sidelines and see how the markets react.

Portfolio Approach


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