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Afternoon Note

Infrastructure Volley

By Charles Payne, CEO & Principal Analyst
5/27/2021 1:21 PM

At midday, the major indices are in the green.  Only 2 S&P 500 sectors are in the red.  The best performing sectors are Industrials and Materials, which are being bolstered by the better-than-expected initial claims report, as well as hopes for an infrastructure deal.  The Senate Republicans have offered a new proposal with a price target of  $928 billion, which is still far below Biden’s $1.7 trillion plan, but is showing a willingness to reach a bipartisan deal.

S&P 500 Index

+0.34%

 

Communication Services XLC

+0.56%

 

Consumer Discretionary XLY

+0.45%

 

Consumer Staples XLP

 

-0.04%

Energy XLE

 

-0.10%

Financials XLF

+0.75%

 

Health Care XLV

+0.11%

 

Industrials XLI

+1.36%

 

Materials XLB

+0.85%

 

Real Estate XLRE

+0.25%

 

Technology XLK

+0.09%

 

Utilities XLU

 

-0.21%

 

Breadth is positive, advancers are outpacing declines, and new 52-week highs are blowing away new lows.

Jobs

On the economic front, initial jobless claims fell by 38,000 to 406,000 beating expectations for 425,000 and is a new pandemic low. As Covid-19 cases continue to decline and government and business restrictions are lifted, filling jobs has become more and more difficult.  As such, several states had withdrawn from the federal unemployment benefit programs.

Chart, bar chartDescription automatically generated

Housing

Annually, pending home sales continue to soar, up 51.7% in April. This is the largest increase ever. All 4 U.S. regions were up y/y.  However, on a monthly basis, pending home sales declined 4.4% versus estimates for an increase of 0.8%. The only region to book a gain was the Midwest. 

As Covid-19 restrictions are being lifted, the rush to the suburbs is waning a bit. Plus, as the eviction moratorium ends and more sellers come out of forbearance, supply should begin to pick up, especially for lower priced housing. According to Lawrence Yun, the chief economist at NAR, "Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes."

Chart, bar chartDescription automatically generated

Speaking of forbearance and loan modifications, the CEO’s from several large banks are being grilled by the House Financial Service Committee on this topic as we speak.


Comments
ENJOY THE EUPHORIA NOW IT IS ONLY A MATTER OF TIME BEFORE THE LUNATIC IN THE WH BANKRUPTS THE COUNTRY THE USA IS HEADED FOR IMPLOSION JUST LIKE ROME

ERNEST REMUS on 5/27/2021 1:47:09 PM
Really like the way you stand up for America and it's workers opportunities to get ahead Charles.

Lorin K on 5/28/2021 12:13:05 AM
I fear for our country. We are being defeated from within. Marxists are taking over and we are in a revolution and don't know it. No shots fired yet!!!!

William Freeman on 5/29/2021 5:42:14 PM
 

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