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Afternoon Note

Holiday Weekend

By Charles Payne, CEO & Principal Analyst
2/14/2020 1:59 PM

The market has turned negative as we head into the holiday weekend after a strong start to the open.  Industrial production, which may have contributed to the market’s decline, showed an expected decline of 0.3% month over month in January, after a downward revised -0.4% in December. Total Capacity utilization came in as anticipated at 76.8%, following an upwardly revised 77.1% in December. Warmer than normal temperatures reduced heating demands, resulting in lower output.  The major contributor to the decline is likely from the production cuts at Boeing (BA).  Speaking of which, United Airline (UAL) is joining other carriers who have not indicated that they will not put the 737 Max back in the air before September 4.

However, it still looks like all 3 indices will finish the week higher and at levels last seen in June. 

From a sector standpoint, the Real Estate sector is outperforming as interest rates drop. The 10 year is down to 1.58%.  Energy is the laggard down.

S&P 500 Index

 

-0.04%

Communication Services (XLC)

 

-0.19%

Consumer Discretionary (XLY)

 

-0.24%

Consumer Staples (XLP)

+0.09%

 

Energy (XLE)

 

-0.78%

Financials (XLF)

 

-0.00%

Health Care (XLV)

 

-0.184%

Industrials (XLI)

 

-0.38%

Materials (XLB)

 

-0.03%

Real Estate (XLRE)

+0.77%

 

Technology (XLK)

+0.11%

 

Utilities (XLU)

+0.53%

 


The decliners have outpaced the advancers, while the new highs outweigh the new lows.

Issues:

NYSE

NASDAQ

Advancing

1,411

1,313

Declining

1,458

1,782

52 Week High

217

183

52 Week Low

43

46

 

The Consumer continues to be optimistic.  The preliminary read for February’s Consumer Sentiment rose to 100.9 from January’s final read of 99.8.  Job security and wage growth is continuing to fuel consumers’ outlook.  The report was just shy of the 101.4 March 2018 high.

 Have a great long weekend.  Happy Valentine’s Day.


 

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