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Afternoon Note

Couple of Bumps

By Charles Payne, CEO & Principal Analyst
6/16/2020 1:51 PM

Question of the Week

Are you more confident that America's economy is coming back faster than the experts warned it would and what plans are you adjusting to take advantage?

Post your answer below.

The market leaped out the gate on amazing news on retail sales and looked to be on its way to another monster session, but it hit a couple of bumps in the road.

It all began when Fed Chair Jerome Powell began his testimony and question and answer period from a bunch of Senators with their own agendas.

Jay Powell said one thing that might have let some air out the rally and something that might help the bull case.

At some point early in the conversation, Powell said the Fed would keep rates at this level until “we are confident,” which is different that the two-year automatic pilot articulated last Wednesday.   Later, he reiterated they are not thinking about hiking rates.

Powell also mentioned the economy coming back if the virus was under control, which seems different than the Fed hymn sheet that said economic recovery was impossible without a vaccine.

By the end of the hearing, the rally regained most of its momentum as Powell was able to achieve his goal of nudging Congress toward more fiscal assistance.

Housing Rebound

The NAHB Housing Market Index surged 21 points to 58 in June and would have been higher if not held back by buyer traffic, which is still legal compromised.

NAHB

United States Nahb Housing Market Index

Retail Sales

The May retail sales number was remarkable, coming in at 17.7%. The pent-up demand from Covid led consumers on a buying spree as economies started to re-open, resulting in $485 billion in receipts, the largest gain since 1992. -39.4%

May 2020

M/M

Y/Y

Retail & Food services

+17.7%

-6.1%

Motor Vehicles & Part Dealers

+44.1%

-3.9%

Furniture & Home Furn. Stores

+89.7%

-21.5%

Electronics & Appliance Stores

+50.5%

-29.9%

Building Materials & Garden Eq. & Supplies Dealers

+10.9%

+16.4%

Food & Beverage Stores

+2.0%

+14.5%

Health & Personal Care Stores

+0.4%

-10.3%

Gasoline Stations

+12.8%

-30.8%

Clothing & Clothing Accessories Stores

+188.0%

-63.4%

Sporting Goods, Hobby, Musical Instrument, & Book Stores

+88.2%

+4.9%

General Merchandise Stores

+6.0%

0.0%

Department Stores

+36.9%

-25.8%

Miscellaneous Stores

+13.6%

-22.8%

Nonstore Retailers

+9.0%

+30.8%

Food Services & Drinking Places

+29.1%

-39.4%

 

Watch the close to see if earlier session highs are taken out…the fear pendulum is squarely in the realm of not missing anymore of this rally rather than losing rally rather than losing one’s shirt.

 


Comments
Charles
I think that the gdp reporting for present 1/4 could be an emotional roller coaster. Be positioned for that!!!

Jerry Halcomb on 6/16/2020 2:20:35 PM
Hey Charles,
I’m Very confident. The “ so called” experts haven’t a clue. I watch you every day have for years. Your a great guy as you have grom and learned from rough lives early on. Be safe and I appreciate you. Best regards, Bob strohrigl

Robert Strohrigl Sr on 6/16/2020 3:19:47 PM
YES --- Build a new house (scale down for retirement) and sell the the old house.

John on 6/16/2020 4:16:41 PM
This economic rebound is shaping up stronger than I expected. Now I'll have to hurry up to take advantage of desperation sales before they're gone.

Patricia Flynn on 6/16/2020 6:34:41 PM
I do believe that the economy will rebound. My concern comes when the "sugar-high" from all of the money the feds put into our economy wears off. Could cause some downturns?

John Gootee on 6/19/2020 3:31:24 PM
John I think the sugar will be in place for a long time maybe two years.  The issue will arise when they start taking away accommodation although some f that can be offset by strong economy,  CP

Charles Payne on 6/19/2020 3:43:12 PM
Too many moving parts...believe we are in for more surprised?
Relying on government to solve problems is not realistic!

Glenn Garrett on 6/23/2020 9:24:21 AM
I have little faith in the government to solve problems but they can make it easier for society to solve problems.  CP

Charles Payne on 6/23/2020 9:39:53 AM
Yes, absolutely

Richard Justus on 6/23/2020 6:49:40 PM
Merging capital and cheap global in oz and whaylan cay networking solutions v early 1990s ec. Food and precious metals to watch

seanmartin on 6/29/2020 12:06:29 AM
To many factors pulling us apart unemployed will continue to rise quality of work force decline business will use these times to contract nyc will look back at the good times and wonder how it happened world conflict back on board. Otherwise things will be great.

Sidney hiller on 7/1/2020 10:37:56 AM
If we can keep Joe Biden out the economy will be fine.

Randy Ray on 7/9/2020 8:10:38 AM
Charles, thanks to much of your intelligent advice, I am bullish on our economy. Like you, I am concerned about the divisiveness in our country, but personally I am growing my market investment.

Terry Steinman on 7/17/2020 2:51:25 PM
Not totally confident yet. I think it will be a bumpy ride until COVID is in a decline.

Stephen Kevil on 7/20/2020 9:32:51 AM
 

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