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Morning Commentary


By Charles Payne, CEO & Principal Analyst
12/29/2020 9:43 AM

We’ve seen this script a lot this month. The market bolts out of the gate as if the only thing that will slow it down is the closing bell - then the move stalls. The thing is the small pullback from earlier highs usually holds, and that was the case yesterday. When the market stalled early, it looked as if profit-taking overtook the fear of missing out (FOMO).

Those stay-at-home darlings took the most heat, with several tumbling more than 10% during the session. Many of these names were already well-off recent highs, including:

Note: Netflix (NFLX) was higher all session long, and I suspect Shopify (SHOP) could turn higher at any moment.

Message of the Market

Communication services enjoyed the largest increase, and Consumer Discretionary was the second-best performer, led by brick-and-mortar names.

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



Communication Services

I see Communication Services (XLC) outperforming Technology (XLK) in 2021. The index just broke out from an ascending triangle stock formation, and it is building momentum.

Market Breadth

For all the changing narratives throughout the year 2020, it has been all about the NASDAQ. And those growth names have powered it to a 43.8% gain for the year. The buyers are more passionate than the sellers this year, particularly when it comes to those growth names that offset concerns about outsized valuation metrics.

The advancers edged out decliners on the New York Stock and NASDAQ exchanges, but there was more down volume on the former. Then there is the old notion that new highs beget new highs.

Market Breadth









52 Week High



52 Week Low



Up Volume



Down Volume




Portfolio Approach

We added a new position to Communication Services today.

Today’s Session

The House passed a bill authorizing the increase in household checks in the “relief” bill to $2,000 from $600. Today, the Senate gets a bite at the apple, and it will be high drama. 

Most Republicans are against folks that are working that have never been laid-off, getting additional money that has to be borrowed. Many election mavens are saying this will hurt Republicans in the Georgia Senate runoff election.

I agree. It’s a dangerous precedent to pay folks that never lost their jobs, and it’s even worse to pay folks who do not bother to seek work. I’m just not sure how many people at $75,000 or less are in those categories.

I wish everything was rigorously tested. But there wasn’t enough time and care to make sure wealthy businesses that somehow got access to the Payroll Protection Program (PPP) funds will also have the ability to write off costs associated with keeping workers on the books. 

I think Republican Senators would be compassionate and wise to vote for $2,000.  

Message to my GOP Lawmaker Friends

Too many of the old guard GOP pundits are moving back into position and sadly this is the hill they want to die on- not providing more than $600 to people that probably lost family members, their jobs and hope during a once in a century crisis. 

They claim this makes Georgia Republicans vulnerable, but they are making those folks vulnerable selling a product that was rejected in 2016.  

Trump's election loss masked the fact the GOP saw massive gains everywhere else, but this is not the Grand Old Party of ketchup as a vegetable and not distinguishing support for free markets with support of the ultra-wealthy shipping middle class aboard.  

The fact is, both parties have mostly played the same games and over the past few decades there has been only one real winner, and it isn't the average American.

If Republican senators vote this through now, they will be able to stave off massive spending in the future that would hang over the head of future generations like the sword of Damocles.  Heck, we might already be there. 

This is a unique crisis with unique outcomes.  When the virus fades into the history books hundreds of thousands of businesses will be closed forever and millions of Americans ready to work will not have opportunities.

This is not paying people not to work but helping fellow Americans with short term boosts. 

By the way if Republicans vote for $2,000 the party would win both Georgia Senate races.

I know we shouldn't be spending money we don't have. But where is there refusal to spend the money on all the pork in these bills. Why do foreign countries get help but the Americans have to be frugal. It just makes no sense and the money is going to be borrowed no matter what and I trust the lower and middle classes have better places to spend it than our government officials do.

Sherry Anderson on 12/29/2020 9:59:25 AM
Charles...your Message was well on point!!! Thanks

GEORGE MARIANNO GOTTUSO on 12/29/2020 10:13:00 AM
Well said - as hard as it is to say we should go more in debt - this time the Senate Republican should go with the increase to $2,000. President Trump is very smart as this might just make the difference in Georgia - and many Americans will be blessed with the amount. It is hard to say but believe it is the right thing at this time.

Tom B on 12/29/2020 10:17:12 AM
Thank you

Edward Fischer on 12/29/2020 10:34:36 AM
Charles, a spot on message to GOP lawmakers friends. There's a lot of hurt out there right now among those making <$75K, and it's not because people don't want to work. We are talking major disruption with a pandemic going on almost one year. And compassion now, in a timely fashion, may help the GOP in managing that future long-term spending free for all that could occur with if the GOP loses influence in future congressional outcomes. Thanks again for the comprehensive perspective.

Ronald Bottano on 12/29/2020 10:36:43 AM
Your comments are so to the point and obvious. Why are many republicans so dumb?

deb weiner on 12/29/2020 12:00:59 PM
The GOP is as bad as the Dems. The "Freedom Caucus" is as bad as the "Squad". When will the American people come first? Principles without purpose and equality over freedom are destroying us.

William Muller on 12/29/2020 12:32:34 PM
Good message Charles. The Republicans cannot look good to anyone by voting against this package. A Georgia victory is more important than standing on principle.

Cynthia Kelly on 12/29/2020 12:44:47 PM
YES $ for the people who are unemployed because the "gov." ( state gov. 's mostly) forced them to be unemployed. NO $ for the governments employees (state or federal) that have gotten their paychecks and pensions paid on time all year. This has gotten nutty. Pay the people who are in the most hurt.

John on 12/29/2020 1:20:50 PM
You hit the nail on the head, I Think now is a good time for a NEW Party. Both the GOP and Dem's in washington need to move on. Our government is not for us, but FOR THEM.

Dick Robbins on 12/29/2020 2:50:33 PM

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