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Afternoon Note

Decisive Action

By Charles Payne, CEO & Principal Analyst
3/10/2020 1:54 PM

The financial media is working harder than normal trying to talk down the rally attempt today with Bloomberg declaring it a dead cat bounce right out of the gate.  It’s obvious there will be continued volatility.  But when I hear the experts' resort to the most frightening language, I believe its overkill.

Dead cat bounce

A temporary recovery in share prices after a substantial fall, caused by speculators buying in order to cover their positions.

I do like that there is decisive action being taken in part of the country, including New York (see headline below):

Headline

N.Y. governor orders coronavirus containment zone in New Rochelle, closing schools, businesses; National Guard to deliver food

Gov. Andrew M. Cuomo (D) said schools, places of worship and other gathering areas within one mile of the outbreak epicenter in New Rochelle will close their doors for 14 days, and National Guard troops will help deliver food and disinfect common areas inside the zone

What I like about today’s effort is the resolve (once all the gains vanished, buyers could have headed for the hill) and the composition of buying. Unlike other big bounce sessions, today, defensive sectors aren’t leading.

S&P 500 Index

+1.44%

 

Communication Services (XLC)

+1.81%

 

Consumer Discretionary (XLY)

+2.04%

 

Consumer Staples (XLP)

 

-0.25%

Energy (XLE)

+0.97%

 

Financials (XLF)

+1.97%

 

Health Care (XLV)

+0.65%

 

Industrials (XLI)

+1.29%

 

Materials (XLB)

+0.47%

 

Real Estate (XLRE)

+0.59%

 

Technology (XLK)

+2.92%

 

Utilities (XLU)

 

-1.34%

 
I feel better and better we will weather the storm, and those that keep their heads on a swivel and not in the sand will be richer once the crisis has passed.

Comments
Always love your positive attitude Chuck!!!

jack sims on 3/10/2020 2:08:36 PM
Thanks for the straight talk. Bloomberg has been pounding the market ever since he talked his way out of the race. I donít listen to his network anymore, too biased. A jealous Trump hater. Go to Bermuda and say there.

Robert Gunyan on 3/10/2020 2:28:42 PM
Of course the media wants to poopoo any rally. The media and democrats are certainly rooting for a recession as it would likely mean the end of Trump's cahnces in November. Personally I do think we've not seen the lows though.

john on 3/10/2020 3:18:51 PM
Talk about fear mongering, heard an analyst on Yahoo Finance this AM talking 3 indicators (one being VIX) w/ 100% of recession. Wow. Then he went so far as to mention "depression" in his speak!! Yet his firm still has a Y-E est of 3300-3400 for S&P500. I was so moved by his concern that I bought beaten down bank, energy & airlines on sale.

Kevin on 3/10/2020 4:41:20 PM
 

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