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Morning Commentary

SPARKING THE INDUSTRIAL ECONOMY

By Charles Payne, CEO & Principal Analyst
1/16/2020 9:13 AM

“Phase One” is in the books, and now the process of putting the pieces into place and getting the ball rolling is the next step. There is no doubt, those that were opposed to fighting back via tariffs, or just adamant the administration could not have a win, will make sure the rollout is a never-ending source of negative news and anonymously sourced stories. But the tangible developments should inform your investing decisions.

Look for the yuan to get stronger, which helps the United States and global trade. Also, look for industrial metals to get stronger, especially copper.  it has been myriad in a decade-long selloff, after peaking at $4.54 per pound back in February 2011.  The key industrial metal has rallied 13.4% since September 3, 2019. 

Precious metals look intriguing. Keep an eye on iron oxide, aluminum, iron ore, nickel, and lead. 

Copper

Christmas Eve Gift

It’s been my experience in life that we don’t always see changes to our lives as a possible gift when they’re occurring in real-time. This is especially true for investors who react in the most panicky or crestfallen fashion to the news of the day, only to regret it later. Remember the 2018 Christmas Eve Massacre? 

The half-day session saw climatic selling in the culmination of despair, driven by a defiant Fed looking to add to its four rate hikes with a matching rally in 2019. It was the overall negative sentiment that didn’t reflect economic reality. The smoldering effect of the selloff carried over into the New Year, leaving almost every single stock in the market pressured.

On December 27, 2018, there were only 8 stocks on the NYSE trading at 52-week highs and only one on the NASDAQ Composite -one stock at a 52-week high!

Fast forward to little more than a year ago. Yesterday, the story was completely the opposite.

The combined exchanges had only 31 new fifty-two-week lows.

Ironically, the new dilemma for nervous investors and fence-sitters is that the market is too high, and there’s nothing to buy. 

Wrong!

Portfolio Approach

Today’s Session

 

Make sure you catch my interview with Peter Navarro on Making Money with Charles Payne on Fox Business at 2PM.

 

Key Earnings

Morgan Stanley (MS)

Signet (SIG)

Important Economic Data

Control group (best gauge of consumer demand), which strips away food, car dealerships, building materials and gas stations, up 0.5 is huge!  This will move the needle on GDP estimates.

Retail Sales

M/M

Y/Y

Headline

+0.3

+5.8

Ex-autos

+0.5

+5.7

Ex-autos & gasoline

+0.5

+4.1

Motor vehicle

-1.3

+4.1

Furniture

+0.1

+3.2

Electronics

+0.6

-0.7

Building & Garden Materials

+1.4

+2.0

Food at home

+0.4

+3.7

Gas Stations

+2.8

+11.3

Clothing

+1.6

+0.1

Sporting Goods

+0.9

+1.8

General Merchandise

+0.6

+2.2

Miscellaneous

+0.1

+8.1

Internet

+0.2

+19.2

Food away from home

+0.2

+4.9

Philly Fed: 17.0, estimate was 4.0

Chart 1


 

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