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Afternoon Note

More Inclusive Rally

By Charles Payne, CEO & Principal Analyst
11/18/2020 1:25 PM

It has been another intruding session where major equity indices belie what is really going on.

The session began with two groups sitting out of the rally: communication and technology, signally continued rotation into what I am calling the normalcy trade. Then in the last hour, the tenure of the session took another turn with these sectors edging higher but classic defense sectors, utilities, real estate, and consumer staples dipping.

In both scenarios, the message is clear, investors are a lot more optimistic about the economy which means a broader more inclusive rally.

S&P 500 Index

+0.20%

 

Communication Services XLC

+0.08%

 

Consumer Discretionary XLY

+0.64%

 

Consumer Staples XLP

 

-0.12%

Energy XLE

+0.37%

 

Financials XLF

+0.78%

 

Health Care XLV

 

-0.56%

Industrials XLI

+0.82%

 

Materials XLB

+0.34%

 

Real Estate XLRE

+0.17%

 

Technology XLK

+0.21%

 

Utilities XLU

 

-0.45%

Single Family Housing Starts

Housing starts came in better than expected, but the news was even better for single family starts which climbed 6.4% month-to-month and 29.4% from a year ago.

United States Housing Starts

So, the market is gyrating but there are huge winners. Investors are grappling with where to buy next.

It’s a difficult situation because it means chasing or buying something that hasn’t moved yet under a variety of investment themes and scenarios. In other words its not as easy as it looks….rarely is.


Comments
On your show today your wonderful guest speaking of energy positions INCORRECTLY referred to fossil fuels as the most dense and therefor best energy source. Actually Nuclear energy is exponentially more dense. After reading Michael Shellenberger's book "Why environmental alarmism hurts us all", at age 73 I was yet again surprised by what I did not know and how inaccurate such an important matter has been presented in lay media. Dec 8th 1953 Eisenhower gave speech to the UN general assembly called "atoms for peace". The science has never changed. The true cost/benefits of Nuclear energy reactors has been harmfully misrepresented. Reminds me of air travel being the safest per mile method of travel but still feared by many. The lives lost from fossil fuel production and use far exceeds Health cost of nuclear energy production. Renewal energy land requirement foot print 500x that of nuclear. Charles you are my hero and you probably already know all this but it still is difficult to accept the consensus of climate change threat portrayed as existential and yet the nuclear answer which appears to be the core answer for the next many years has been swept aside to the point your your guest simply mis-stating the most basic fact. If she would have just acknowledge that Nuclear energy i.e. the power released from breaking up a nucleus is exponentially greater and more dense than the chemical reactions associated with using fossil fuels. If you haven't had time to read Schellenbergers book it is a great read.
Thanks for all you do. Enjoyed your book Unstoppable Prosperity. Helped me organize what I've learned over 30 years. These days I sell options for monthly income. I have 3+ million in cash & securities. My hair-dresser mother with 8th grade ed. raised six kids. I used to polish my relatives shoes, Shovel snow, turn in bottles for dep. when I was small child. I have read lots of great stuff: Jessie Livermore 'Reminisces of a stock operator as useful as anything". But I've read dozens more. In the end I use as you; technical analysis, fundamentals, balance sheets, and thanks to you I pay much more importance to forward guidance. Also have put all my positions on a whiteboard divided into the sectors. Very useful. Sorry for going on but like you, markets are my fascination. And your experience is very relatable to me. Stay well.
Dave Hancock

David Wayne Hancock on 11/20/2020 2:58:03 PM
 

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