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Morning Commentary

GROWTH STOCKS BEAT DRUM MAJORS

By Charles Payne, CEO & Principal Analyst
5/25/2021 9:37 AM

It was a nice start to the week, led by those stocks that infuse more confidence than any other niche.

I’m talking about those mega growth, mega-cap names at the forefront of everything we do in life. 

Internals

Once again, the ride was sweet, but under the hood, the engine was not firing on all cylinders. This is a ‘summer doldrums’ kind of volume.   

Market Breadth

NYSE

NASDAQ

Advancing

2,174

2,152

Declining

1,153

2,024

52 Week High

202

127

52 Week Low

26

43

Up Volume

2.47B

1.83B

Down Volume

1.22B

1.61B

Buying the Dip

The coolest chart I saw yesterday underscores just how steady buyers have been – showing up like clockwork to buy the dip. 

Fun Stat

I had a blast rooting for professional golfer Phil Mickelson on Sunday. It was because of his personality, how he reinvented his body and game, and how he slew the young lions, including his playing partner.  Perhaps, somewhere deep down inside, I know a win would be good for the stock market.

Check out this table from the whizzes at LPL Financial.

 Image

Reversal

Michael Saylor, CEO of MicroStrategy (MSTR), and Elon Musk got together with crypto miners to discuss ways to make the mining effort cleaner. This happened as China is reportedly on the cusp of completely outlawing the practice. Keep watching Bitcoin (BTC) as it rebounds. There will be a kind of confidence lift that also benefits growth stocks.

Portfolio Approach

We added to Consumer Discretionary yesterday in the Hotline Model Portfolio.

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Today’s Session

The Case-Shiller US 20 city home price index rocketed 13.3% year over year to 251.57 in March, up from 12% in February.  This was the greatest increase since December 2013.  Month over month, the index rose 2.19%.

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Cities with the largest increase include:

More people continued to move from the cities to the suburbs and housing supply remains constrained. According to Craig Lazzar, Managing Director and Global Head of Index Investment Strategy at S&P DJI, “These data are consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years. Alternatively, there may have been a secular change in preferences, leading to a permanent shift in the demand curve for housing.”


Comments
Thanks Charles

Lorin K on 5/25/2021 10:13:11 AM
 

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