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Afternoon Note

Crossing 3300

By Charles Payne, CEO & Principal Analyst
1/16/2020 1:42 PM

The major indices are soaring today after the signing of the Phase One trade deal and are up about 0.6%. For the first time, the S&P 500 is trading about 3300.  Good economic data and the earnings season starting off in the right direction, for the most part, is adding to investor enthusiasm.  The Russell 2000 is one to watch today, up 1.1%.

All eleven sectors of the S&P 500 are in the green with Financials and Technology leading the way.

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)


In economic news, initial claims declined by 10,000 to 204,000 for the week ending January 11.  A better gauge, the 4-week moving average, was down 7,750 to 216,250.  Continuing claims also declined, down 37,000 to 1.767 million. The overall trend remains lower and is indicative of a tight labor market.

Speaking of things that point to tight labor markets, the Builder Confidence for single family homes was down one-point January to 75 according to the NAHB. However, the past two months read have been the highest sentiment levels since July 1999.  Low interest rates and good labor market have added the need for even more new single-family homes. 

According to Robert Dietz, the NAHB Chief Economist, “With the Federal Reserve on pause and attractive mortgage rates, the steady rise in single-family construction that began last spring will continue into 2020.” He added, “However, builders continue to grapple with a shortage of lots and labor, while buyers are frustrated by a lack of inventory, particularly among starter homes.” 

The NAHB/Wells Fargo Housing Marked Index (HMI), which charts the traffic of prospective buyers, was +1 to 58, the highest read since December 2017.


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