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Afternoon Note

Great Day for the Market

By Charles Payne, CEO & Principal Analyst
3/24/2020 1:37 PM

It’s a great day for the market, but it’s only a day, and the market hasn’t closed. You can believe the bears, curmudgeons and others that want to see greater misery will try to jawbone the market lower.

How oversold is the stock market?

There are several names up significantly, which have only made a dent in the overall paper losses:

Nonetheless, market breadth is impressive, and encouraging.  What stands out as a glaring reminder of the depths of selling, however is there is only one stock this afternoon changing hands at a new 52-week high on the New York Stock Exchange.

Market Breadth

NYSE

NASDAQ

Advancing

2,809

2,800

Declining

194

426

Unchanged

12

35

Total

3,015

3,261

52 Week High

1

7

52 Week Low

45

74

Advancing

2.83B

1.50B

Declining

205.72M

357.31M

Unchanged

585,082

3.95M

Total

3.03B

1.86B

 
Yesterday there were positive signs, including market breadth.

Volume

NASDAQ

New Lows

NYSE 805 last week high day 2,330

NASDAQ 783 last week high 1,937

Message of Market

The S&P 500 is being paced by the biggest losers, which are Energy, Industrials and Materials.  Some of this isn’t just extreme oversold bounces.  There are names in the mix like Whirlpool (WHR) and Sherwin Williams (SHW) that should benefit from the housing boom, which should slow but remain a juggernaut driven but household formations. 

Meanwhile, the defensive sectors Utilities and Real Estate continue to trail, which is a good sign.

S&P 500 Index

+8.10%

Communication Services (XLC)

+5.28%

Consumer Discretionary (XLY)

+8.40%

Consumer Staples (XLP)

+4.61%

Energy (XLE)

+12.77%

Financials (XLF)

+11.21%

Health Care (XLV)

+6.58%

Industrials (XLI)

+10.68%

Materials (XLB)

+11.60%

Real Estate (XLRE)

+6.09%

Technology (XLK)

+9.11%

Utilities (XLU)

+7.59%

 

Existing Home Sales

Sales of previously owned houses surged 6.5% month to month, coming in at an annualized rate of 5.77 million, well above consensus of 5.50 million.  Last August, I saw the start of a 2020 housing boom, and I think it will resume. There will be stocks that benefit well beyond the broad market performance.

United States Existing Home Sales

United States Existing Home Sales

 


Comments
We put our house on the market on March 2 and now 3 weeks later we have not had a single person come to see it yet. It is home selling season here on Cape Cod. We will be a canary in the housing it We put our house on the market on March 2 and now 3 weeks later we have not had a single person come to see it yet. It is home selling season here on Cape Cod. We will be a canary in the housing market. Ah, price discovery!

Dick Nicholson on 3/24/2020 2:28:04 PM
 

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