It was one of those days that will never be forgotten. A confluence of events -the long-brewing and growing powder keg of anger, animosity, and distrust finally ignited in front of our eyes on Capitol Hill. 

We saw a peaceful protest against what many felt was an unfair election, but it quickly morphed into the kind of chaos that still feels unreal. I cannot believe what I saw. Americans invaded the building where elected officials presided as the count of the Electoral College had begun.

There is no doubt folks have a right to express their frustration, but this was 100% unacceptable. 

After we get through the requisite outrage, there are deeply rooted issues that must be acknowledged and addressed. There are too many folks in the country being left behind. And a large swath that does not want to be compensated for lost opportunities.

These people want the ability to determine their future and create their path to prosperity. This feeling isn’t new. However, their sense of urgency and panic - that was held in check for the last four years - is slipping away. What’s left are people standing in a puddle of doubt and anger.

It can’t be brushed off with the Hollywood treatment, and it should not be ignored. 

I am sure this stoked the overflow of rage yesterday. Protesters showed their angst by disrespecting the police and threatening lawmakers. It was a disastrous action. It felt like the Twilight Zone - just a surreal situation of protesters pushing through police lines, who were protecting the Capitol, only to watch them rush inside.

Those actions were not justified.

Those actions were un-American.

I worry desperately. We need to address the disenfranchisement of those that have felt voiceless for so long, or they will be pushed off even further, or never addressed at all.

It will be the role of lawmakers and the next administration to not just see the images from yesterday but to trace them back to the wells of despair. Something has to be done beyond stimulus checks.

The federal government will be moving in a new direction that elevates climate change to the most urgent issue facing the nation and the world. Many proposed solutions to arrest climate change will be a tall task when the worst offenders do not plan any changes. It will put even more economic pressure on many of the folks that were in D.C. yesterday. 

The violence yesterday was awful. Let’s hope it's not a reason not to hear the legitimate pleas of millions that think everything is going to be taken away from them. 

Message of the Market

The stock market gave up amazing gains, as images of the Capitol began to dominate TV  and social media. 

But at some point, the pullback stalled, and the market rally held up, except for the NASDAQ, where selling in tech stocks was a dominant theme of the session. When the dust settled on this crazy session, market breadth was very bullish.

Market Breadth	NYSE	NASDAQ
Advancing	2,020	2,393
Declining	1,170	1,395
52 Week High	374	480
52 Week Low	6	10
Up Volume	3.75B	4.32B
Down Volume	1.19B	2.61B

In the midst of this, the Federal Reserve released its Federal Open Market Committee (FOMC) minutes, which suggested “tapering” will eventually happen and committed to adopting qualitative outcome-based guidance. Neither happened in the last meeting, however.

Obviously, there is a need for the latter to happen a lot sooner than the former. But the fact of the matter is the Fed has new unofficial mandates that go beyond maintaining healthy labor markets and controlling inflation.

The market knows the Fed isn’t going to hike rates, but soon the market may demand the Fed to prove its commitment to accommodation with more aggressive actions. Meanwhile, so-called cyclical stocks that rally with an improving economy dominated the session.

S&P 500 Index	+0.61%
Communication Services XLC		-0.34%
Consumer Discretionary XLY	+1.15%
Consumer Staples XLP		-0.15%
Energy XLE	+3.16%
Financials XLF	+4.25%
Health Care XLV	+1.10%
Industrials XLI	+2.26%
Materials XLB	+3.97%
Real Estate XLRE		-0.62%
Technology XLK		-1.48%
Utilities XLU	+2.37%

Portfolio Approach

Yesterday, we added new positions in Communication Services and Industrials in our Hotline Model Portfolio.

Today’s Session

Initial jobless claims came in lower than expected at 787,000, down 3,000 from the prior week.  Expectations was for 752,000.  A better gauge, the 4 week moving average declined by 18,750 to 818,750 compared to 219,750 in the prior year. 

 

Continuing claims decreased to 5.072 million, down by 126,000. And the 4 week moving average dropped by 177,250 to 5,274,750 compared t 1,736,000 in the previous year

Comments

We were brought up fighting communism and here it is in our own government. Why is it anyone pointing a finger at at the extreme leftists. Bernie and the 8. You tell us this is it and it will be almost impossible to turn it back around. Nobody shot Antifa or BLM! And they shoot a 14 year vet of the Airforce who sees what is going on. Yes the Capitol police got sprayed. Law enforcement has been spraying citizens for decades. I support Law enforcement and they have been held back and defunded and when they don’t perform or can’t, let’s disparage them. There’s enough blame to go all around!!! Guy Portman on 1/7/2021 8:19:14 AM

With our crooked media, I don't believe we will get the true story about 1/7. The bad actors who stormed the building were probably the same ones responsible for the looting and rioting all summer. And the media's hypocrisy is sickening. Thank you for helping us focus on the market!! Happy New Year Diane on 1/7/2021 9:05:02 AM

The riots yesterday looked like an antifa moment with Trump flags thrown in. Are we sure it wasn’t? Unacceptable for sure in any event. Dave Dittmer on 1/7/2021 9:06:04 AM

"A DAY OF INFAMY....A confluence of events -the long-brewing and growing powder keg of anger, animosity, and distrust".....BINGO JOHNNY. "There are too many folks in the country being left behind"......> the other side encourages and lives for that> they believe correctly that that gives them power from the depths of the desperation of others tom friedman( moron ) spouting off this morning in his self rightousness as are many others - they fail again to be truthful by blaming one side only - they speak in a BUBBLE MAXINE WATERS & OTHERS /NBC/CNN/WASH POST/NYTIMES/LATIMES/DEMORAT MAYORS/POLITICIANS/STATES CHANGING VOTING RULES ILLEGALLY /AND ETC ETC ETC. today it's all about > everything was peaceful in america until yesterday happened - with Zero blame on the other side they want security in the capitol ( we all do) for themselves ...BUT ..what about our security - open borders - maxine waters/others threatining republicans - hillary>deplorable - black people> white people hate you crap....Abe Lincoln/G Washington are evil .....Etc Etc... chaplain barry black yesterday - did he say AMEN afterwards - i looked for it and did not see it.....if so> even he plays the politics of the other side ......unless this problem is dealt with fairly instead of a one sided attack.....sadly nothing will change - NBC etc will in time as they are doing so today - they will revert back to the division that they have created for the past decades......NBC needs to change hands otherwise nothing will change/ Biden> " a new beginning"..????...it's more of the same. prettydiect on 1/7/2021 9:27:12 AM

I heard your comments this morning in FOX. Please don't stop there. Make your voice louder. Susan on 1/7/2021 9:27:22 AM

SAD day when all we want is a shot at prosperity for the human race, and that starts with Liberty for all. John Cowger on 1/7/2021 10:00:24 AM

I condemned the BLM riots and now I must condemn the Trump Rally Riot. It appears that Trump has also spoke out against the rioters, I hope so. I am conservative and want the conservative party to survive and fight (peacefully) another day. We got our back ends kicked in the Senate but there will be another election in 2 years. Bob Blocker on 1/7/2021 10:09:24 AM

The sad thing, president Trump will be remembered for the chaos yesterday and not the good things he accomplished. His actions the last few days have severely damaged VP Pence and the Republican party. Republicans and Democrat lawmakers are the real problem because of their refusal to address the issues that have led to peoples frustration. Politicians are more interested in elections than focusing on the needs of the country. Iran, China and Russia are laughing at our democratic republic. Sad day for the United states. robert soutas on 1/7/2021 10:27:44 AM

No mention of infiltration of non Trump supporters . Don’t preach that the acts were u acceptable.Of course they were.Capitol Police you will learn shot a and killed a citizen.Cowering to the mob it is not acceptable either. Jean on 1/7/2021 10:32:46 AM

Very well said, Charles. Thank you so much. Jonathan Roberts on 1/7/2021 10:49:35 AM

The acts of some of the protesters were "Un-American" I agree. But the acts of our elected officials are just as un-American. We are a nation of laws, but elected officials who pick and choose which laws they want to follow are just as un-American. The list is long including our immigration laws, state and federal election laws, laws for arresting and prosecuting criminal offenders to name a few. The weaponizing of federal agencies including the FBI, CIA, and congress itself to take down a duly elected president are equally "Un-American." But where is the condemnation and accountability? Nowhere to be found. The American people need good, honest and transparent leadership, but if our leaders continue to exhibit and send out Un-American behavior it will be returned to them. You receive what you send out, it is the natural "Law of Attraction" in action. Our nation will never come together until our elected leaders do. It will take a true leader to step up and make this happen. Unfortunately there are none in sight. Douglas Sutton on 1/7/2021 11:01:34 AM

CVP you are doing one hellava job speaking out when necessary = THANK YOU! Alexander Fraser Tytler quote is telling a story about our future. So be prepared for what you will read here: Just thought I'd share this. “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.” fred wiese on 1/7/2021 11:22:20 AM

I am disgusted by the hypocrisy that blames President Trump for "inciting the rioters", after Democrats disavowed any responsibility for rioting during these past 4 years. Most of us endorse peaceful protesting and nobody, including Trump, can prevent all hoodlums from committing criminal acts. Both parties can do a much better job of communicating with each other and the public, not to mention the media. Jim Lukas on 1/7/2021 11:24:37 AM

When the right riots it is an "insurrection" but when the left riots, burns down peoples businesses and takes over several blocks in a city's downtown and declares it a "Free State" it is a "mostly peaceful protest"----Bull Corn! JIM C RAWSON on 1/7/2021 11:32:28 AM

Charles, Thanks for staying above the FOX BS. Peter Granata on 1/7/2021 11:34:06 AM

Misplaced blame for yesterday from the media, including Fox, for the tens of thousands who assembled peacefully outside the capitol, show they paint everyone with the same brush. There were some bad apples who broke into the capitol and made everyone look bad. Some of the words used by reporters were Mob, Horrible, Disgusting, Everyone should be ashamed, were simply general descriptions of what they assumed all of the crowd was doing. Good reporters are more discriminating about how they sort out the acts of the bad from the rest of the crowd. It appeared to me that the "antifa" group was primarily the riot starter and encouraged the damage and blood inside the Capitol. The left has long been to blame for the violence throughout our nation over the last year. There never was any repercussion or even acknowledgement from the major news sources. James G Palmer on 1/7/2021 11:46:03 AM

I agree on more media responsibility and in fact think they are an arm of a power structure that aims to keep the nation divided.  I would rather spend time drilling down beyond the trouble makers and excuses to what's causing pain for the masses- that is where we can find 80 to 90% of folks of all stripes dealing with the same issues and concerns that stoke their anger, animosity and lack of hope....all are off ramps to violence and rebellion.   We elect folks to find solutions to these issues but they actually use them to gain and stay in office.  Almost all major institutions ostensibly designed to guide the nation have let us down and so that lost trust only makes matters worse - where are people going to turn other than their own echo chamber.  Repercussions are fine as a matter of law but we need solutions that truly take into account the layers of obstacles.  Here's the rub": those solutions would weaken the very institutions we need to promote and enact them.  Meanwhile we must find ways to respect the rights of people to have different opinions and not go to war with them.  Interestingly the framers saw this hence the First Amendment. CP Charles Payne on 1/7/2021 12:01:56 PM

My hope will be when Congress digest the anger of the people from yesterday, some will have a "come to Jesus" moment. But I doubt it! We need to have election reform- big time! Mike Moule on 1/7/2021 12:03:51 PM

I do not condone violence. In my opinion,"the silent majority"loss their cool yesterday. Changes in many areas are needed to be made ASAP, State and local election laws to be uniform, voter rolls need to be purged of dead people and people who are no longer living in the state.. At the same time we need to do away with 230 clause, giving protection to media giants like Facebook and Twitter for censoring the news. Congress must learn to act together to pass legislation for benefit of American citizens. Stop the politics of division and hate! Without swift action, our country will be lost as we know it. God bless America.. BOB JENNINGS on 1/7/2021 12:14:05 PM

Dear CP, I agree whole heartedly with your well defined thoughts as you expressed 1-7-21 @12:01PM Maria-Litka Bennett on 1/7/2021 12:31:22 PM

The acts of some of the protesters were "Un-American" I agree. But the acts of our elected officials are just as un-American. We are a nation of laws, but elected officials who pick and choose which laws they want to follow are just as un-American. The list is long including our immigration laws, state and federal election laws, laws for arresting and prosecuting criminal offenders to name a few. The weaponizing of federal agencies including the FBI, CIA, and congress itself to take down a duly elected president are equally "Un-American." But where is the condemnation and accountability? Nowhere to be found. The American people need good, honest and transparent leadership, but if our leaders continue to exhibit and send out Un-American behavior it will be returned to them. You receive what you send out, it is the natural "Law of Attraction" in action. Our nation will never come together until our elected leaders do. It will take a true leader to step up and make this happen. Unfortunately there are none in sight. Douglas Sutton on 1/7/2021 12:43:34 PM

I agree with your comments Mr. Payne and thank you for making them. The striking thing to me is this: Antifa and their like always were masks to hide their identity because they know what they are doing is wrong. The vast majority of the people protesting yesterday were not wearing masks. James Briscoe on 1/7/2021 12:57:51 PM

Charles, you hit it RIGHT ON the head!!! I'm old enough that these issues don't directly affect me but I do see tens of millions who are watching their living standard fall off a cliff and employment opportunities for them and their offspring right behind it. I doubt that in a world economy we can stop the flow of opportunity to foreign shores but at least the previous administration tried. Biden will read a lot of 'happy' speeches but nothing will get better. Unfortunately, yesterday was just the beginning. I'm glad I'm old! Bob DesRochers on 1/7/2021 1:21:01 PM

Charles thank you for your comments. You make us proud by displaying the truth. Keep up the good work. You are fair and it is greatly appreciated. Everyone knows that the elections were stolen. We just pray that the "TRUTH" will come out one day. GOD BLESS.... Conrad Bird on 1/7/2021 2:15:03 PM

Yesterday was a sad day for America. We surrendered the enforcement protocols of our Constitution. Paul on 1/7/2021 2:56:14 PM

The abdication of Law and Order that has been permitted by numerous states, cities, and federal officials for the past couple of years plus Democratic statement that they were just protesters set the stage for this kind of behavior. You cannot allow DLM, Antifa, QAnon or anyone break Laws, burn and loot repeatedly without creating a precedent where others feel it's OK for them to behave in the same criminal manner. Our NATIONAL LEADERS ARE ALL SO PARTISAN IT IS DISGUSTING! The calls for decency, civility and moral behavior do not exist any longer in American Politics! garro on 1/7/2021 4:55:23 PM

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