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Afternoon Note

Solid Economic Activity

By Charles Payne, CEO & Principal Analyst
8/5/2020 1:35 PM

It is another solid day for the market. Behavioral trends are getting a boost from fundamental trends, namely from this earnings season, which was slated to be a disaster. Instead, it is informing investors, especially those that missed this rally and are loath to chase.   Earnings are beating the street at a remarkable level.

2Q 2020 Earnings Trends

384 Reported






Blended Average




Technology has obviously benefited, but now investors are using these beats to justify moving into other areas of the market, especially value names.  Hence, the strong performance today.

2Q 2020 Earnings Trends

Best Sectors




Health Care






Eight of the eleven S&P 500 sectors are in the green, as investors rotate once again out of safe haven stocks.

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




Crude oil inventories continue to come down on a larger than expected draw down.  We learned today that in the past week, there was more than seven million barrels drawn down, which is more than twice the expected 3 million decline.


More Positive Signs

ISM Services for July came in at 58.1 against consensus of 55.5 and up from 57.1 in June.

Business activity surged to 67.2 from 66.0 to reach the highest level since January.  Both ISM reads on manufacturing and services underscore solid economic activity.

ISM Non-Manufacturing 


Wonderful explanation of what is happening in the market. I appreciate it.

Joseph Pajak on 8/5/2020 2:13:28 PM

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