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Morning Commentary

Trump Recovery & Fiscal Stimulus

By Charles Payne, CEO & Principal Analyst
10/5/2020 9:16 AM

Over the weekend, I had the chance to delve into a lot of data out last week, including the final read on September Consumer Sentiment from the University of Michigan.

I’m not a big believer in polls; although, directional trends matter.  I do pay attention to Consumer Sentiment and Confidence trends because their spending is 2/3 of the nation’s GDP.  There were supplemental questions on the election and expectations.

One question I never hear asked is which candidate would be best for personal finance.  In this question, President Trump has a large edge of Biden; although, in the same survey, one percent more respondents see Biden winning.

Adding even more intrigue is the overwhelming expectation that the next five years will see better personal finance.  The most optimistic age bracket are young millennials.  An astonishing 84% expect good things for their wallets and pocketbooks while only 4% see things getting worse.  Food for thought as everyone plays the Presidential election guessing game.

Election & Expected Economic Impact

Trump

Biden

Net

Best for Personal Finance

33%

26%

+7

Economy

38%

33%

+5

Expected Winner

47%

48%

-1

 

Personal Finance

Best

Worst

Net

Past Five Years

64%

26%

+38

25 – 34

38%

33%

+5

Expected Five Years

56%

11%

+45

25 – 34

84%

4%

+80

Message of the Market

The market swayed to and fro on Friday, climbing off deep pre-opening declines, but failing to rally into the plus column, and finally ebbing into the closing bell.

The most interesting aspect of the session is tech was not a safe haven, as investors flocked back to traditional comfort stocks in the Utilities and Real Estate sectors.

Value buyers did show up in the Industrials and Materials sectors and bottom fisher took a shot at Energy stocks.

 

S&P 500 Index

 

-0.96%

Communication Services XLC

 

-1.98%

Consumer Discretionary XLY

 

-0.42%

Consumer Staples XLP

 

-0.56%

Energy XLE

+0.96%

 

Financials XLF

+0.79%

 

Health Care XLV

 

-0.91%

Industrials XLI

+1.12%

 

Materials XLB

+0.89%

 

Real Estate XLRE

+1.62%

 

Technology XLK

 

-2.54%

Utilities XLU

+1.18%

 
 

Lots of Energy names were among the top ten winners, along with a couple of Financials.  What they have in common is 2020 has been devastating.  Investors are guessing the selling is overdone.

Lyondellbasell Industries

XLB

+4.10

+6.02%

United Rentals

XLI

+9.67

+5.51%

Devon Energy

XLE

+0.50

+5.49%

Invesco

XLF

+0.60

+5.33%

ONEOK .

XLE

+1.26

+4.99%

Diamondback Energy

XLE

+1.38

+4.74%

Apache

XLE

+0.43

+4.62%

SL Green Realty

XLRE

+2.07

+4.38%

Marathon Oil

XLE

+0.17

+4.30%

Fifth Third

XLF

+0.86

+4.09%

 

Hotline Model Portfolio Approach

We took profits in Materials and raised Cash to 15% in our Hotline Model Portfolio.

Today’s Session

Everyone watching and waiting for President Trump to depart Walter Reed hospital.  Already markets around the world have started strong on word that could happen as soon as today. 

Meanwhile, we continue with stimulus watch.  Watch S&P 500 key resistance of 3,400 for a major buy signal.

Trump’s Tweet Storm

Beginning with tweets on the stock market, President Trump when on a twitter tweet storm this morning.

PROTECT PREEXISTING CONDITIONS. VOTE!

BETTER & CHEAPER HEALTHCARE. VOTE!

MASSIVE REGULATION CUTS. VOTE!

BEST V.A. EVER. 91% APPROVAL RATING. VOTE!

401(K). VOTE!

BIGGEST TAX CUT EVER, AND ANOTHER ONE COMING. VOTE!

STOCK MARKET HIGHS. VOTE!

 


Comments
Well, there (Tweets) is his next debate outline. Stick to that and hammer Sleepy Joe!

Tim Taylor on 10/5/2020 10:09:42 AM
This (your) information is invaluable. Thank you so very much

Nancy J Tindall on 10/5/2020 10:20:28 AM
 

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