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Afternoon Note

Intriguing Narratives

By Charles Payne, CEO & Principal Analyst
7/27/2020 1:32 PM

Question of the Week

The extra $600 in weekly unemployment benefits, provided by the federal government on top of what the states provide, is set to expire at the end of the week.

Should Congress extend this benefit as is, or at a lower amount (if so what), or should it simply expire?

Post your answer below.

The market is mostly marking time, but there are several intriguing narratives.

Materials (XLB) just hit an all-time high lead by a mix of gold stocks and chemical companies.  It’s been more than a decade since hot money sought out fertilizer stocks, but the recent action suggests they are back.


Big Tech

Technology (XLK) is putting in a strong performance as Big Tech is sending a message of invincibility.  Not only are the CEOs of today’s Mega winners heading to Capitol Hill this week, they are also posting earnings results.

The semiconductors are acting great with many reaching all time high levels.

The semiconductors are taking their lead from Taiwan Semiconductor this morning, but the industry is on fire in general.

#2 KLA Corporation





#4 Xilinx Inc.





# 5Arista Networks Inc.





#6 LAM Research Corp.










Energy (XLE) and Financials (XLF) continue to suck wind…enormous disappointments.

S&P 500 Index



Communication Services XLC



Consumer Discretionary XLY



Consumer Staples XLP



Energy XLE



Financials XLF



Health Care XLV



Industrials XLI



Materials XLB



Real Estate XLRE



Technology XLK



Utilities XLU



Homebuilders are rocking and lifting the homebuilder index near a 52-week high point.

Lower because it is past time to get to work. Think of everything as a product if it is good you want to be out there promoting. If the product is not that good what does it matter, nobody is using or buying.

Rich on 7/27/2020 1:53:33 PM
Reduce the $600 by one-half. That will help with the vitals and incentivize us to return to work.

Howard Kirschner on 7/27/2020 1:55:28 PM
Charles, thank you for your daily analysis. Jim Rawson

Jim C Rawson on 7/27/2020 1:58:22 PM
Lower with a limit equal to a percent of salary as is done with LTD benefits. Doing otherwise encourages people to not return to work.

Rick Strater on 7/27/2020 1:59:22 PM
We need to stop the hand-outs! Let the free loaders turn on the Dems. who are using this Pandemic to further strike division. It's time to let their scheme backfire on them, force them to insist that they must go back to work or face the music. It will make the "protesters" have to get up and go to work instead of feeding the anarchy.

Diane on 7/27/2020 2:06:06 PM
Cut it out or at best in half we need more incentive to get back to work otherwise the cure will killl before the disease

James Cuff on 7/27/2020 2:08:30 PM
I say let it expire and bring back the real Donald Trump. No better way to kick-off/re-ignite a re-election campaign with a make sense approach. We need to be led out of here not mired down in it.

Robert Clanton on 7/27/2020 2:25:37 PM
Charles, this is insanity to continue running up our debt to GDP on this. We live in the United States of America, one of the laziest and incompetent nations on earth. Providing "stimulus" payments in this amount is not realistic. People in our country are not just going to go back to work to make less money. Congress needs to hire contractors to do some serious research on this. I think a great place to start is putting a "cap" on what the unemployed can make. For example, 35% of 18/19 salary, taken as an average...

Hope you guys are well and staying safe.

Your friends in ATL- Blake and Alonso

Blake Fortune on 7/27/2020 2:25:52 PM
I think it should expire. I live in Aspen, CO. Restaurants and other service industry businesses have been challenged getting people to work due to the benefit payments. Workers are enjoying the summer off. It compounds the issue of not allowing Visa's for seasonal workers.

Cheryl L Schmidt on 7/27/2020 2:26:13 PM
Definitely lower the amount. Need to reduce the incentive to not work. If their employer is able to hire them back, then they should not be paid by taxpayor dollars to not work.

Keith Wood on 7/27/2020 2:33:53 PM
Stop or cut in half or more. This is like welfare benefits. People make more from the Government, so they sit on there butts instead of going back to work All healthy people need to be at work not at riots.

Cathy on 7/27/2020 3:11:25 PM
Do whatever will get Trump elected. But I think the printing presses might run out of ink!

John McLees on 7/27/2020 3:13:34 PM
They never should have paid that amount to begin with, max unemployment should have been enough. No one wants to work anymore. It needs to expire.

Della Arnold on 7/27/2020 3:20:42 PM
We should let the $600 per week additional federal benefits expire. Aren't the states in a position to fund their own unemployment benefits?

Debby Deering on 7/27/2020 3:25:28 PM
Charles, thanks for all your work and guidance. Watching you since BULLS&BEARS, VARNEY, CAVUTO , keep it going my friend, we are listening. Ps your ETFs ar5 close to sectors in Mutual Funds and very helpful to us timid investors. 6

NICK CIFFONE on 7/27/2020 3:29:50 PM
Do whatever it takes to keep Trump in office. However, I think it is ridiculous to pay UI higher than pre Covid wages. Paying people to protest the hand that feeds them? Lowering the UI supplement will motivate people to find a new job.

John on 7/27/2020 3:52:17 PM
Eliminate $600 or at least cut it way back

Bill Davis on 7/27/2020 4:59:47 PM
$600 is an ABSURD amount of money and is causing MAJOR FRAUD in the unemployment systems of the USA..... should be ENDED IMMEDIATELY

Laura Radtke on 7/27/2020 5:03:02 PM
Expire. We need to remove rewards for not working, unless there's proof their company or industry is not going back to work yet.

Scott on 7/27/2020 5:07:09 PM
At the lower rate. Give unemployeds incentive to find work....not a hand-out.

Karla Warlin on 7/27/2020 5:42:14 PM
Lower - it will be tough enough for people to scrape themselves off the sofa when it's critical to survival.

Patricia Flynn on 7/27/2020 7:08:08 PM
Lower the amount or let it expire.

Rod H Irwin on 7/28/2020 8:14:47 AM
I would like to see the 600 be retired over a periods of weeks. Give people a chance to find a job but also let them know the Fed 600 is going away.

Mike Rogers on 7/28/2020 8:55:05 AM
Lower. Encourage people to go back to work. If a person has been arrested in violent protest or in jail or illegal. Then nothing.

Patrick on 7/28/2020 9:44:16 AM
Charles i was recently furloughed and have initiated UEB. Here in Louisiana its only 247 per week. Many, like myself have just been displaced. I'm in the blue collar sector oil and gas. So, $1000 a month is ridiculous. So what to do? Is it fair for some to get 3 or 4 months of supplement and new arrivals to get 2 weeks?

Malcolm Lee Gibson on 7/28/2020 3:27:00 PM
I am concerned that the first debate is after many states start early voting. I think this is a real disadvantage for Trump who should be able to put Biden in his place, but if voters vote before they see this, that is bad.

Paula Holt on 7/28/2020 6:44:33 PM
Let the enhanced benefits expire. Many small businesses can't reopen because they can't hire a team to run operations or those that have opened still need to hire enough employees to provide quality services or produce quality products. Lack of enough employees available for hire since reopening has been one of my biggest challenges as an employer and consequently has had a negative effect in customer service and sales. It's simple: no employees = no business.

D Anderson on 7/28/2020 10:03:49 PM
It depends on how the incentive is defined. Paying incentives to stay home is not going to get the economy moving. Rather, give individuals an incentive to go back to work.

Mary Shultz on 7/29/2020 8:06:57 AM
Need to reduce amount. Many Atlanta employers canít get employees back to work because they are making more by not working.

Richard keenen on 7/31/2020 11:46:51 AM
Let it expire. Many businesses can't get going again because they are unable to get their employees to come back to work because they are making more staying at home. This is unfair to the taxpayers and essential workers that continue to go to work.

M Parker on 7/31/2020 1:18:17 PM
I don't think we can generalize this. Many who are not "allowed" to go back to work in Gyms, etc. were making much more in real life. Including most bartenders, and good waitresses. So, let's not assume all are lazy, overpaid, etc. Of course the Dems want to pay everybody more that $15 / hr, and they will probably prevail here.

jim r on 8/2/2020 6:32:46 PM
Continue, but change to make it more beneficial to go to work. If you are helping someone who was working poor, but is now unemployed because of COVID19, that is great. When it takes some who only works long enough to go on the next unemployment benefits then it is not so great. The unemployed waiter who wants to go back to work, but can't find employment and is getting more now than when they were working and uses the money to pay down old debt, so that when work comes they will be better off, I say great!

Jay Jay on 8/3/2020 10:19:54 AM
Let it expire. It's insane to make more money not working it incentivise workers not to return to work. Nuts.

Hon Fong on 8/3/2020 11:06:54 AM
suspend the payroll collection - that will get into the economy quicker then anything else.

bill kunitz on 8/3/2020 3:39:16 PM
Charles, thank you for asking this question I'm going to attempt to answer from first-hand knowledge.

First, we must consider the 3.7 million high school students who graduated from high school in 2020.
Most of them had jobs, and most of them lost their jobs.

Second, to get unemployment, you had to be working for at least 1 quarter of the year in most states. Not one person that is legally receiving unemployment is a "freeloader."

Third most states didn't start paying unemployment until
the past two weeks due to a lack of software and workforce to accommodate the millions that applied.

These delays overpowered food banks and food stamp programs.

Evictions are happening primarily due to the delays in the payments.

Forth, that money is going right back into a depressed economy.

Retailers like Wayfair, Macy's, Walmart, Target, and many others extended and forgave late payments, and credit card companies that offered assistance all benefited.

If I were President Trump, I would keep the same amount and extended it to the end of the year.

I'm positive that if all the pork that Dems are trying to sneak in, the package was taken out. And if Trump demands. That states get the payments out. He would win the election, but he would also regain many of the voters he has lost. This is not the time for the President to appear to have abandoned the people, but to get in the trenches with them and dig.

Ceste on 8/6/2020 3:49:11 AM
Lower or even stop it completly.
Then all the people rioting won't get paid by us to riot. They'll have to go back to work

Thomas Haddad on 8/7/2020 3:32:23 PM
The 600 dollars goes to all the are drawing unemployment. This includes the person working 4 days and is on unemployment for one day and drawing that one day unemployment (NEW YORK). WHAT ?? My brother is banking the 600 per week and going to invest or purchase something when the prices are right. 600 per week is ridiculous for this kind of example. Sad case of unintended consequences!!

Paul Pipher on 8/10/2020 9:07:51 AM
If it were up to me, I'd do a sliding scale down. Slowly start reducing the additional benefit - phase in the reduction over August to December. If there has to be another round of stimulus we can look at it then. This "spend money we don't have" mentality has to stop. I don't want to see another 18% prime rate like we did in the early '90s.

Brew on 8/10/2020 11:58:10 AM

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