Yesterday, the S&P 500 finished fractally lower, and the NASDAQ Composite had a strong session, fending off waves after waves of pressure. The excitement was outside the major indices with recent Initial Public Offerings (IPOs). And Software-as-a-Service (SaaS) cloud names had monumental sessions. 

Market Breadth	NYSE	NASDAQ
Advancing	1,663	2,285
Declining	1,448	1,364
52 Week High	178	236
52 Week Low	3	16
Up Volume	2.90B	3.09B
Down Volume	1.77B	1.42B

Meanwhile, blue-chip buyers remained focused on Energy names, as West Texas Intermediate (WTI) continues to make major strides. Crude oil is up 31.2% since November, and might only just now be breaking out.

WTI Crude

Big Bucks Stacking Up

After plunging in the first quarter, U.S. household wealth has boomeranged back to a new record high:

• $140.3 trillion assets
• $16.8 trillion debt
• $123.5 trillion net household wealth  

During the third quarter, American households enjoyed a $3.82 trillion increase in their net worth, powered by the big move in stock prices. The moral of this story is you have to own stocks because eventually, they will move higher and they can change your life:

• +$2.76 trillion: stocks
• +$430 billion: real estate
• +$33 billion: debt
• +$593 billion: (other)

Airbnb

Another successful IPO has tongues wagging about market tops. These are individual stories, mostly about a shift in American life. We are doing lots of things differently, including how we vacation, and where we stay when we go out of town.

I think about hotels when I’m going somewhere, but my 24-year-old son thinks of Airbnb (ABNB).

When you think about it, “new” ideas like delivering food, renting out your home, and even electric vehicles are not new business models. The thing is technology allows them to be more efficient, and therefore, more attractive. The ABNB stock was priced at $68 and finished its first day of trading at $144.71 per share.

A remarkable debut - in a remarkable year. 

Portfolio Approach

We added to Healthcare yesterday morning, and sold a stock in Material this morning in the Hotline Model Portfolio.

After the Close

There was lots of news after the close from big household names will influence today’s session.

Disney (DIS) hosted its Investor Day 2020 with a big headline: 86.8 million streaming subscribers. 

LuluLemon (LULU)

• Revenue beat the Street: +22%
• Earnings beat by $0.68
• Comp-store +18% against the consensus of +4.3%
• E-commerce +93% = 45% of the total revenue
• Women: +33%
• Men: +14%
• Direct-to-consumer: 43% of the total revenue

Costco (COST)

• Slim beat on revenue of $43.21 billion
• Earnings of $2.29 against the consensus of $1.93
• Comp-store: +17.1%
• U.S. comp: +17.0%
• E-commerce: +86.2%
• Membership fees: +7.1%

Today’s Session

Major indices are pointing to a lower open. Congress continues to fail to see the urgency of a stimulus deal.  On the vaccine front, the FDA approved the emergency use of Pfizer (PFE) and BioNTech’s (BNTX) Covid vaccine. 

However, in Europe, Sanofi (SNY) and GlaxoSmithKline (GSK) Covid vaccine will be delayed till the end of 2021.  Trials had an insufficient response in elderly people. In addition, a Brexit deal between the UK and EU looks to be teetering.  

Here at home, PPI rose just 0.1%, in-line with consensus. On a year-to-year basis, PPI rose 0.8% beating consensus 0.7%. Core PPI rose 1.5% y/y, beating consensus 1.4%. All eyes are on the University of Michigan Consumer Sentiment, which is out at 10am ET.

Comments

Charles, thank you for your positive (& realistic) outlook. It's always uplifting and encouraging to me. I pray that you and your family all have a very merry Christmas. Tom Wood on 12/11/2020 9:08:42 AM

Thank you so much Tom Merry Christmas and a much Happier New Year.  CP Charles Payne on 12/11/2020 11:36:19 AM

Thank you so much Tom Merry Christmas and a much Happier New Year.  CP Charles Payne on 12/11/2020 11:36:47 AM

Charles, what technology stock would you suggest for the future right now that would pay a decent dividend and be consistent in the marketplace for someone in their early 60's still working full-time? Thanks. Joseph Wallace Drake on 12/11/2020 10:57:32 AM

Joe this is actually tricky.  Most of the fastest growing tech winners are plowing money back into the business.  Maybe IBM fits the bill.  It's down a lot after mismanagement for a decade including a lot of dumb stock buybacks.  Huge dividend and soon Red Hat takeover and ditching non-performing business segments could transform the company.  CP Charles Payne on 12/11/2020 11:31:31 AM

Charles, Merry Christmas to you and your family. Really appreciate your insights to the market. I am 72 and have a portfolio that is 85% stocks and would appreciate your recommendation on some non-stock investments, bond funds?, metals, etc. Jim Cleveland on 12/11/2020 2:28:22 PM

Merry Christmas Jim I will work on this - hint: not a big fan of bonds even at your age (some but is cool).  CP Charles Payne on 12/11/2020 2:53:24 PM

I have been pretty successful taking some contrarian positions over the past 6-8 months. Do you have any suggestions for me to consider? Merry Christmas to you and your family Michael Seybold on 12/11/2020 3:33:33 PM

Shorting clean energy would be the ultimate contrarian play considering the ESG movement and top money managers (trillions of dollars) ready to back them up al lot of government largess)..CP Charles Payne on 12/11/2020 3:45:40 PM

Merry Christmas and many blessings to you and your family Charles. I admire and value you, your story and your opinions. Catherine Arbogast on 12/11/2020 5:25:21 PM

Great report Charles! Have a wonderful Christmas with your family. Lorin K on 12/11/2020 7:21:13 PM

Thanks to you and your book, I now know just how true your statement, “ you have to own stocks because eventually, they will move higher and they can change your life.” With your guidance and education, I see a whole new world of possibilities. Thank You!!! Jeanne R on 12/12/2020 8:29:24 AM

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