We are back to a few stocks doing all the heavy lifting, but of course, these stocks are Clydesdales and have a lot of experience pulling the entire market. All the major large equity indices were higher yesterday, with the S&P 500 and the NASDAQ at record highs.

S&P 500 Index	+0.03%
Communication Services XLC	+0.36%
Consumer Discretionary XLY	+0.47%
Consumer Staples XLP		-0.34%
Energy XLE		-3.38%
Financials XLF		-1.07%
Health Care XLV		-0.47%
Industrials XLI		-0.78%
Materials XLB		-1.46%
Real Estate XLRE		-0.33%
Technology XLK	+1.29%
Utilities XLU		-0.59%

Heavy Hitters

Five companies in the S&P 500 account for 21.64% of the entire index, which means major sway.

• Apple (AAPL) 6.49%
• Microsoft (MSFT) 5.21%
• Amazon (AMZN) 4.28%
• Facebook (FB) 1.97%
• Alphabet C (GOOGL) 1.89%
• Alphabet (GOOG) 1.80%

Even though there were far more decliners than advancers, the down volume swamped the up volume on the NYSE, and the S&P 500 still finished higher.

Market Breadth	NYSE	NASDAQ
Advancing	1,226	1,668
Declining	1,928	2,172
52 Week High	212	349
52 Week Low	1	7
Up Volume	1.82B	4.98B
Down Volume	2.65B	2.17B

Consumer Discretionary

While there is no doubt Amazon (AMZN) has an outsized influence on the Consumer Discretionary (XLY) sector, there are a lot of exciting niches (the sector is comprised of eleven industries).

Data compiled by Facteus suggests those $600.00 stimulus checks are finding their way into the economy. There are big year-to-year gains in areas that are benefiting, including restaurants, which had been negative for a few months.

If the needle moves like this with $600 clams, imagine an extra $1400. Hello! I have been talking about brick-and-mortar for a long time (we have four open in the Hotline Model Portfolio), but we are going to go over our work and peer reviews to find brand new ideas.

Sales Trends	Jan 3	Jan 10	Jan 17	Stock
Dept stores	+15%	+46%	+3%	DDS
Discount stores	+35%	+54%	+37%	DG
Wholesale clubs	+30%	+46%	+39%	COST
Video games	+56%	+64%	+43%	EA
Restaurants	+2%	+16%	+12%	CMG

21^st Century Makeover

In my book Unstoppable Prosperity, I write about why investors should consider investing in boring, old, and plodding names. I focus on companies that are more than one hundred years old, and why even when they aren’t outperforming, they can provide a level of safety.

For the most part, any company that’s been around for a century or longer has been through ups and downs, survived recessions, and depressions, and fended off competitors. But these names become even more attractive while reinventing themselves.

That’s the case with Ford (F), founded in 1903, and General Motors (GM), founded in 1908. They are on fire, up 30% and 28% respectively in the past two weeks, while Tesla (TSLA) is only up 3%.  It’s easy to have written these companies off, as they have lost a big chunk of market share over the past 25 years.

But they are survivors, having outlasted close to 500 competitors: https://en.wikipedia.org/wiki/List_of_defunct_automobile_manufacturers_of_the_United_States

Now, they are seen as legit players in the electric vehicle space with strong pipelines and partners. Ford will unveil the electric Mustang and Bronco this year and F-150 next year.

F, GM & TSLA

Looking to Reinvent

After the close, two tech names in desperate need of makeovers released their quarterly financials. 

International Business Machines (IBM) missed on revenue but posted a big bottom-line beat, but the stock walloped in after-hours trading.

Intel (INTC) has been hot since the CEO stepped away. It was one of the biggest winners in the session.  Perhaps it got ahead of itself, as shares slipped after the company posted results that beat on top and bottom.

Portfolio Review

 We want to put cash to work, but we will not force the issue.

Today's Session

The futures are pointing to a lower open. There is renewed investor concern about tighter, extended coronavirus restrictions. Hong Kong announced it would lock down 150 residential buildings, and President Biden warned that U.S. deaths will hit 500,000 next month.

On the economic front, we get PMI manufacturing data and existing home sales number this morning. 

Comments

Hey man Would you buy IBM or INTC on the dips? Steve M on 1/22/2021 9:23:26 AM

I do not like the fundamentals of either but Wall Street getting behind Intel so there should be good risk-reward on this dip. CP Charles Payne on 1/22/2021 9:25:55 AM

Thanks CP. Will be watching at 2:00. Have a good weekend. For reelz. Steve M on 1/22/2021 9:41:58 AM

I wonder what will happen after a few more days of Biden ex actions and what those actions will be? Lorin K on 1/22/2021 10:45:13 AM

you do good work mate Ha! Like to see you do maybe 15 mins. on your show on what stocks you like, no one else, I think when you did that before those other people would simply confuse things, that's what Jim does, very successfully I might add. when you find something that works, where you got the idea has nothing to do with it mate, for my money, that's the best way to get more listeners, throw in a CEO and maybe some questions from viewers, the Judge at noon on CNBC, is a good show he absolutely controls that show and the guests gives us some info and tips, and never mind the news, we get that from everybody all day long... follow the money... Cheers Bryan on 1/22/2021 10:58:32 AM

By a good company and hold it. I did 60 years ago with allied chemical as Honeywell was then known. I am well off today. Thats what the young can do today and not worry about when to buy in. In 50 years it wont matter Charlie Francisco on 1/22/2021 11:12:22 AM

The restaurants in my area of North East Ohio are mostly shut down except for takeout, My wife's and my stimulus check going to pay credit cards, how does that stimulate the economy? David Schwartz on 1/22/2021 11:20:41 AM

Also, I can see already the new administration leaning back towards what they know best, overtax, and over-regulate David Schwartz on 1/22/2021 11:26:28 AM

Would it be fair to say that automakers are up because it's expected that Biden + Dem congress will shove more subsidies for electric vehicle boondoggles down our throats and the automakers will fleece the taxpayer yet again, boosting their bottom lines? Chris on 1/22/2021 12:04:03 PM

I watch what you advise Charles. Great insight. You said in the spring to take a look at undervalued stock such as CDEV. I bought it and it has gone up like a rocket ship. Now I definitely pay attention to your every word. David Chapman on 1/22/2021 7:04:27 PM

How do we apply pressure to reverse XL pipeline & open borders EO’s? Not interested in living in this socialist unilateral Obama 3.0 bologna country we’re headed for! “IN GOD WE TRUST” Michael Carter on 1/26/2021 7:03:14 AM

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