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Morning Commentary

JOBS & RECOVERY HOPES

By Charles Payne, CEO & Principal Analyst
7/2/2020 9:47 AM

Once again, it was a bifurcated market on Wednesday that saw Big Tech & Communication Services names lift the NASDAQ to an all-time high. But the old stodgy tech names in the Dow Jones Industrial Average (IBM, Cisco, and Intel) were among the biggest losers in the index. The biggest disappointment came from airline stocks, which took off at the open and closed negative on the day.

The S&P 500 eked out a net gain; however, buying was focused on defensive sectors: Utilities and Real Estate. 

S&P 500 Index

+0.50%

 

Communication Services XLC

+2.48%

 

Consumer Discretionary XLY

+1.01%

 

Consumer Staples XLP

+0.09%

 

Energy XLE

 

-2.43%

Financials XLF

 

-0.86%

Health Care XLV

+0.77%

 

Industrials XLI

 

-0.45%

Materials XLB

+0.21%

 

Real Estate XLRE

+2.73%

 

Technology XLK

+0.16%

 

Utilities XLU

+2.34%

 
 
Market breadth deteriorated throughout the session, reversing solid internals, resulting in more decliners and a greater downside volume by the closing bell.

Breadth

NYSE

NASDAQ

Advancing

1,542

1,536

Declining

1,442

1,821

52 Week High

50

109

52 Week Low

2

14

Up Volume

1.71B

2.51B

Down Volume

2.70B

1.99B

 
Manufacturing Renaissance

More great news came from the manufacturing sector. The June Purchasing Managers’ Index report (PMI) came in at 52.6, well ahead of the consensus estimate of 49.0 with strong percentage point gains in key categories. 

Employment remains in deep contraction for the 11th month in a row.

Manufacturing Renaissance

June

Change

PMI

52.6

+9.5 PP

New Orders

56.4

+24.6

Employment

42.1

+10.0

 

Rollbacks

More rollback news from California and McDonald’s (MCD), coupled with a mandatory mask notice in Pennsylvania, became a speedbump. Watch for President Trump to promote masks soon, which would please the market.

Portfolio Approach

There were no changes in our Hotline model portfolio yesterday.

 

Portfolio Approach

We added a new Consumer Discretionary Position and reduced Cash to 5% in our Hotline Model Portfolio.  If you are not currently a subscriber to our Hotline service, call your account representative or email Research@wstreet.com.

Today’s Session

In June, the jobless rate fell to 11.1% from 13.3% in May.  There were 4.8 million jobs gained from 2.7 million in May, as the continued resumption of economic activity ramped up. New people filing for claims decline by 55,000 to 1.43 million, which is an improvement but is still historically high.

Jobless Rate Month over Month

The futures doubled on the news.  We will have more information on the economic data released in our Afternoon Hotline.

 


Comments
Charles, you are such a quiet easy going guy, no passion! You are GREAT, love you on FOX! And, thanks for this "Making Money"!

John McLees on 7/2/2020 10:11:26 AM
I just want to say that I think Charles Payne is the greatest!!! Hes a smart patriot!!! Go Charles!👍🇺🇸 Linda

Linda McCormick on 7/2/2020 12:33:42 PM
 

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