Morning Commentary
Goodbye to all my friends at home
Goodbye to people I've trusted
I've got to go out and make my way
I might get rich you know I might get busted
But my heart keeps calling me backwards
As I get on the 707
Ridin' high I got tears in my eyes
You know you got to go through hell
Before you get to heaven
Big ol' jet airliner
Don't carry me too far away
Jet Airliner
Steve Miller
Royal Caribbean Cruises |
XLY |
+$10.11 |
+21.00% |
Norwegian Cruise Line. |
XLY |
+$3.01 |
+19.60% |
American Airlines |
XLI |
+$1.78 |
+15.38% |
Carnival Cruise Line. |
XLY |
+$2.27 |
+15.11% |
United Airlines |
XLI |
+$4.61 |
+14.52% |
MGM Resorts |
XLY |
+$2.04 |
+12.59% |
Live Nation |
XLC |
+$5.40 |
+11.64% |
Hilton Worldwide |
XLY |
+$7.41 |
+10.08% |
It might surprise some that airlines are in S&P Industrials (XLI) and not Consumer Discretionary, but these stocks trade in the sector with other transportation names in railroad and trucking. The sector has flashed signs of taking off only to be proven as false alarms.
The key name in the sector is the same name that needs to keep rallying for the Dow Jones Industrial Average: Boeing (BA).
In yesterday’s session, nine stocks enjoyed larger percentage gains than Boeing, but their collective weight in the sector is 4.68 versus 4.64 for Boeing. The company has been the recipient of $24 billion of government contracts in the past three days:
Next Leg Higher
I like the current momentum and love the chart formation, as the sector is coming off the bottom of the trading range and faces its first upside test at 76, and top of channel above 80.
Spreading the Wealth
Ten of the eleven S&P sectors rallied yesterday and value clearly outperformed growth. I continue to welcome this dynamic but also caution broad market indices cannot rally if Communication Services and Technology are getting hit.
S&P 500 Index |
+0.95% |
|
Communication Services XLC |
+0.61% |
|
Consumer Discretionary XLY |
+1.53% |
|
Consumer Staples XLP |
+0.28% |
|
Energy XLE |
+2.08% |
|
Financials XLF |
+2.11% |
|
Health Care XLV |
+1.22% |
|
Industrials XLI |
+2.74% |
|
Materials XLB |
+1.88% |
|
Real Estate XLRE |
+0.55% |
|
Technology XLK |
+0.45% |
|
Utilities XLU |
-0.07% |
S&P 500 Winners
S&P 500 Losers
Nasdaq Winners
Nasdaq Losers
Market Breadth
Portfolio Approach
We took profits on two names in the Hotline Model Portfolio yesterday, and we put on two long new ideas. I am excited about the performance of names on the New Buy List, which moved away from growth to value in the last week. Many of those names were lower before yesterday.
There is a chance we could take action early in the session.
After the close a number of high profiled Twitter (TWTR) accounts were hacked to promote bitcoin. The news sent shares of Twitter lower and unleashed an avalanche of humorous tweets. This is one of my favorites:
Bill Gates, Elon, Apple accounts gets #hacked People who saved their passwords on Google:
Investors have normally piled into HACK ETF on this kind of news. We are also watching BUG, which has a higher valuation metrics but some serious fast-moving stocks.
Today’s Session
Retail sales for June increased 7.5% as restaurants and stores continued to open. Total Sales of $524.3 billion rose from $487.7 billion in May and were close to pre-pandemic numbers as clothing and electronics, furniture and motor vehicle sales rose. Gas sales also rose as many went back to work or simply out on the road. Bars and restaurants saw an increase of 20%. Sales declined in two areas, online sales and grocery store spending.
We will see if trend continues as some cities and states rollback openings.
June 2020 |
M/M |
Y/Y |
Headline |
+7.5% |
+1.1% |
Ex-Motor |
+7.3% |
-0.5% |
Motor |
+8.2% |
+7.5% |
Furniture |
+32.5% |
-3.5% |
Electronics |
+37.4% |
-12.7% |
Building Materials |
-0.3% |
17.3% |
Grocery |
-1.6% |
11.7% |
Health and Personal Care |
+3.5% |
-5.7% |
Gasoline |
+15.3% |
-19.1% |
Clothing |
+105.1% |
-23.2% |
Sporting Goods |
+26.5% |
+20.6% |
Department Stores |
+19.8% |
-10.6% |
Internet |
-2.4% |
+23.5% |
Restaurants |
+20.0% |
-26.3% |
On the unemployment front, new jobless claims were essentially flat, down 10,000 to 1.3 million last week. Initial claims filed for Pandemic Unemployment assistance dropped to 928,488 from the prior week’s 1,046,433.
Comments |
"Come writers and critics who prophesize with your pen And keep your eyes wide, the chance won't come again And don't speak too soon, for the wheel's still in spin And there's no tellin' who that it's namin' For the loser now will be later to win For the times, they are a-changin'" garro on 7/16/2020 10:13:04 AM |
Tweet |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
4/17/2024 9:37 AM | POWELL STILL WANTS TO HELP |
4/16/2024 1:35 PM | Muted |
4/16/2024 9:42 AM | FEAR ARRIVES |
4/15/2024 1:17 PM | Making a Statement |
4/15/2024 9:45 AM | Equal Opportunity Drubbing |
4/12/2024 1:37 PM | Pressure Overall |
4/12/2024 9:42 AM | WHO YA GONNA CALL? |
4/11/2024 1:38 PM | No Urgency |
4/11/2024 9:27 AM | Tough Sledding |
4/10/2024 1:22 PM | Hang In There |
4/10/2024 9:51 AM | HERE COMES THE LATEST RATIONALE FOR PERSISTENT INFLATION |
4/9/2024 1:56 PM | Fighting the Trend |
4/9/2024 9:46 AM | NEXT TIME, MAKE IT A HOLIDAY |
4/8/2024 9:45 PM | Cautious Feel |
4/8/2024 7:19 AM | IT’S ECLIPSE DAY |
4/5/2024 1:51 PM | Higher and Cheaper |
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