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Morning Commentary

Can Strong Start Hold?

By Charles Payne, CEO & Principal Analyst
9/28/2020 9:20 AM

Friday session gained power after Florida announced it would allow restaurants in the state to operate at 100% capacity.   Even before the headline, the so-called reopening trade was leading the session after an upgrade of cruise lines at Barclays.  This morning looks to be picking up the momentum.

Of course, reopening is the ultimate key to the stock market and movement in those names should make us all more optimistic. In the end it is all about technology, as the mover of major indices.

Information technology services names lead the way, as business software names powered ahead of the pack. 

S&P 500 Index

+1.60%

 

Communication Services XLC

+1.33%

 

Consumer Discretionary XLY

+1.30%

 

Consumer Staples XLP

+0.53%

 

Energy XLE

 

-0.07%

Financials XLF

+1.03%

 

Health Care XLV

+1.61%

 

Industrials XLI

+1.50%

 

Materials XLB

+0.89%

 

Real Estate XLRE

+1.94%

 

Technology XLK

+2.39%

 

Utilities XLU

+1.64%

 

 

Market breadth obviously improved but there were still more 52-week new lows than new highs.

Technology (XLK)

The technology sector sees some resistant at 114.22, but the big test comes at 116.50. Beyond there, I do not see a lot of resistance to a quick retesting of the high.

The S&P 500 has made a perfect series of lower highs and lows and needs to close above 3,400 to reverse bias and perhaps power move to retest the all-time high.

 

Hotline Model Portfolio Approach

No changes.


 

Today’s Session

There will be more urgency for those folks with cash burning a hole in their pockets.  The focus will be on reopening and technology. 

It will be interesting to see if the rally attempt holds, as conventional wisdom shifted this month to “sell the rip” from “buy the dip”. 

Stocks to Focus

Cruise Lines

CDC “no sail” order set to expire on Wednesday.

Tesla (TSLA)

Deal with PLL and buying LG Energy Solution.

Boeing (BA)

May get 737 certifications in Europe by end of the year.

Netflix (NFLX)

Sell rating but firm target $420 from $425 (stock is up).

SPACS

Tortoise Acquisition (SHLL) to finalize its merger with Hyliion.

Virgin Galactic Holdings, Inc. (SPCE) Received two upgrades.

RVs

Thor Industries, Inc. (THO) posted Monster Earnings.


 

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