Morning Commentary
Today, I am hosting a virtual Town Hall special on Fox Business with Mark Cuban and will cover efforts to save small businesses and how the nation will look post-crisis. Tune in… |
Yesterday was a solid session, although I would have liked to see a stronger close, as the market was able to react positively to fundamentals, news and developments. It was something of a barbell session with investors who poured into those Technology names that have gotten stronger in the last three months. Chasing fundamentals isn’t the same as chasing performance. Many Technology names were enjoying even more rapid adaptation and growth before the crisis began.
On the other end of the spectrum, investors took on greater risk in the oil patch.
Utilities were also strong, and I continue to be torn. Is this a sign of angst with investors seeking equity exposure in safe havens, or is this a part of a barbell approach by professional investors seeking limited downside and bigger yields? It’s probably a combination of both.
S&P 500 Index |
+2.29% |
Communication Services XLC |
+2.69% |
Consumer Discretionary XLY |
+2.16% |
Consumer Staples XLP |
+0.96% |
Energy XLE |
+3.56% |
Financials XLF |
+1.08% |
Health Care XLV |
+1.53% |
Industrials XLI |
+1.05% |
Materials XLB |
+1.97% |
Real Estate XLRE |
+1.74% |
Technology XLK |
+3.85% |
Utilities XLU |
+2.92% |
Two stocks that caught my eye the most yesterday were Twitter (TWTR) and Facebook (FB). Facebook seems to be sleepwalking through the pandemic as a company and stock, along with Twitter, which seems to be downgraded every day. Of course, both these names rallied on the Snap (SNAP) news and first quarter results, which sent the share price +37.6%. Facebook traded 10 million more shares than usual and closed above a key resistance level.
Moral Dilemma? Yesterday, I went on America’s Newsroom on Fox News and got a little hot under the collar while discussing why Harvard University accepted taxpayer funds designed to help individuals most impacted by the coronavirus economic shutdown and said it wouldn’t return the funds. It takes a special kind of elite privilege to take millions from a pot of money to help displaced Americans while you have $40.0 billion in the bank. I am not sure how much my rant played a part (see link). However, by the end of the day, Harvard had a change of heart and said it wouldn’t take the money after all. https://twitter.com/AmericaNewsroom/status/1252984626467004424 Today, I am hosting a virtual Town Hall special on Fox Business with Mark Cuban and will cover efforts to save small businesses and how the nation will look post-crisis. Tune in… Ironically, these are examples of successful businesses that started with one person and a dream. We’ve had Ruth’s Chris in the model portfolio, and I featured the company on one of my first shows because it is a quintessential American success story. A widow with no business experience, making curtains for extra cash, sees an ad in the classifieds for the sale of a failing restaurant: Chris’ Steak House. She uses all her savings and gives it a shot. Potbelly got $10.0 million from the PPP, and they paid the CEO a $100,000 bonus. But there is no doubt they need financial help. The company went public in late 2013 at $14.00, which was well above the range of $9.00 to $11.00, and the shares more than doubled to $30.00. Net Income
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Portfolio Approach
We had a good session yesterday, but not one to force the issue with limited cash.
Today’s Session
The market has mostly been meandering all morning. The reactions to news however, especially earnings, has been reflexive selling no matter the actual outcome. Target (TGT) gave an update that looked great on the surface, but the shares are under serious pressure.
Oil is higher, as equilibrium returns to the futures, but big questions including a bailout linger.
There are lots of questions and debates about opening the economy. There is a segment of the economy that is suffering severe financial hardship.
Employment data actually sparked a reversal in equity indices, as the carnage continues to get less bad, but it is still heartbreaking.
Initial jobless claims declined to 4.42 million, which was largely in-line with various consensus numbers, but the five-week total hit 26.5 million.
Initial Jobless Claims
Continuing claims rocketed to 15.9 million from 11.9 million, which is by far the highest level on record. The street was looking for 16.5 million.
Comments |
The first round should have gone to the micro small business onwers, 10 employees or less. They are the worker bees. The big guys (small businesses) were first and they have the ability to stretch it out where as the micros do not. Most of the big banks wanted to serve there bigger customers - this is sad. The banks knew what was best but look out for themselves first. Mark Schwab on 4/23/2020 9:54:34 AM |
Great point Mark....instead it went to the largest "small" businesses and then some banks pushed out long time depositors to deal with smaller banks with tiny backoffices and little guidance. CP Charles Payne on 4/23/2020 9:57:08 AM |
We truly don't seem to do anything right when it comes to any Govt programs. Heartbreaking Dsvid Howley on 4/23/2020 10:18:51 AM |
I agree with you. Outside of the military when the generals are allowed to make major decisions other than that these big institutions are mostly about power and they understand the predicament of solving issues actually removes urgency and power. CP Charles Payne on 4/23/2020 10:22:16 AM |
As a 30 yr. owner of a $5-8M per year small bus, No I don't think they should be eligible for the loan. I don't consider them a small business. Being that large, they should have other options for financing. If they were strugling B-4 Covid-19 they need to address those problems. Haviing a $10M loan totally forgiven on the backs of taxpayers is not what was intended. James M Rowe on 4/23/2020 11:00:02 AM |
Spot on James, spot on. CP Charles Payne on 4/23/2020 4:05:15 PM |
You the man Charles! I agree totally. Turn America loose! Cut the tax rates across the board, increase entrepreneurship by ending regulation and unrealistic restrictions on citizens running business's and trying to start new business. America has and will lead the world in opportunity and success in returning this nation and the world back to prosperity. Go Trump! John Johnson on 4/23/2020 11:05:15 AM |
The small program was supposed to help Main Street, how did we stray to Ivy League schools and other institutions that are hoarding money to begin with? Disappointing for sure. Our funding institutions are heartless and don’t get the struggle of small business at all. That is all businesses with 50 employees or less. Sad. Iris on 4/23/2020 11:11:50 AM |
NO! Small businesses not Big losers businesses. John Cowger on 4/23/2020 11:18:55 AM |
I was brought up with the lesson of distinction between 'Want' and 'Need'. Potbelly (and others) definitely want. Need, not so much. Ronald Layton on 4/23/2020 11:22:56 AM |
Well FDR said one of the freedoms should be freedom from want - and there is a current political push for people to get everything handed to them and never have to worry about working learning and getting better. They've turned JFKs "ask not" upside down so it stands to reason businesses feel the same way. Nuts! CP Charles Payne on 4/23/2020 12:15:38 PM |
Right on Charles! I've been having a back and fort dialogue with proponents of a universal income and for the life of me I cannot understand how anyone things the World owes them an income! And, furthermore that they have a right to the fruits of someone else's labors which is exactly what a universal income is all about. We need a smaller more efficient and supportive government that rewards work, saving and innovation for the future prosperity of the USA. garro on 4/23/2020 12:49:28 PM |
In these financial times everyone should contribute to the need to support individuals and small business. CEOs already earning millions should not morally offered or accepting $100,000 bonuses. james pond on 4/23/2020 1:04:17 PM |
There are great stories out there but it's so unfortunate when these rear up because they feed other negative narratives about capitalism. CP Charles Payne on 4/23/2020 4:00:33 PM |
If large companies have not been properly managed they should not he getting help from the government. Why should we the the pay CEO $100,000 if he is a poor manager. Charlie Pacheco on 4/23/2020 1:16:10 PM |
Now you are getting to the heart of another matter that has haunted investors for decades....rewarding poor execution and planning. CP Charles Payne on 4/23/2020 1:21:33 PM |
There is no way they should get PPP money. There is no doubt they have been affected by the virus, but there are a multitude of small companies who could get by on the amount of bonus money their CEO got. N H Noel Hobbs on 4/23/2020 2:03:22 PM |
If anything can be fraudulently handled it is government handouts. There are those who major in theft (congress ) and we see that happening now. No one owes anyone anything, especially the government. Get off your lazy asses and w o r k. phyllis on 4/24/2020 6:48:22 PM |
They’re NOT a small business. We’re dying while high end steak houses etc. get millions. I have been saying for several weeks this virus will kill more small businesses than people. Robert Totman on 4/28/2020 10:02:27 AM |
The thing is efforts to save small businesses are being hijacked by folks that A) have millions and billion in bank B) access to funding sources unavailable to small businesses. CP Charles Payne on 4/28/2020 10:07:26 AM |
Tweet |
3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
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