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Morning Commentary

Internals Weaker Again

By Charles Payne, CEO & Principal Analyst
7/23/2021 9:29 AM

Yesterday, big mega-cap growth was back in the driver’s seat, but it was largely an inconclusive session.  Weakness in Energy and Financials belie the overarching Wall Street narrative about growth and Fed policy.

S&P 500 Index

+0.20%

 

Communication Services XLC

+0.34%

 

Consumer Discretionary XLY

+0.43%

 

Consumer Staples XLP

 

-0.17%

Energy XLE

 

-1.12%

Financials XLF

 

-1.09%

Health Care XLV

+0.74%

 

Industrials XLI

 

-0.37%

Materials XLB

+0.04%

 

Real Estate XLRE

 

-0.71%

Technology XLK

+0.74%

 

Utilities XLU

+0.15%

 

Breadth Goes Bad, Again

After strong back-to-back sessions saw internals improve, it was right back to deteriorating market breadth.

There were far more decliners than advancers and more determined sellers than buyers.

Market Breadth

NYSE

NASDAQ

Advancing

1,018

1,506

Declining

2,259

2,870

52 Week High

77

92

52 Week Low

22

53

Up Volume

746.60M

1.51B

Down Volume

2.58B

2.03B

S&P 500 components below their 50-day moving average edged lower as well.

This is not the stuff of strong markets, so I have been reluctant to add new positions.

Earnings Reactions

Intel (INTC) posted strong numbers and offered higher guidance, so obviously, the stock moved lower. On the other hand, the Street bid up social media stocks that mainly posted positive financial results.

Snap Inc (SNAP) and Twitter (TWTR) enjoyed big initial pops to the upside, as well as Skechers (SKX).   Perhaps it won’t be the big names that move higher on beats and strong guidance but smaller cap stocks.

Next week is the big week.

Portfolio Approach

We are adding a new position in Consumer Staples in our Hotline Model Portfolio this morning. If you are not a current subscriber to our premium Hotline service, email Info@wstreet.com to join today.

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Today’s Session

It’s off to the races on the backs of good earnings as indices reach new highs.  The Nasdaq futures topped 15,000 for the first time this morning as social media and big cap tech stocks help push it higher.


Comments
Have a restful family week-end Charles and staff!

Lorin K on 7/23/2021 12:17:21 PM
 

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