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Morning Commentary

Fears Fanned

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

It was tough sledding all session yesterday that saw some buyers emerge from 2PM to 3PM, but any intraday bounce was always going to be limited and doomed.

There is too much going on and now it seems everyone is layering it on pretty thick. 

Treasury Secretary Yellen described an economic Armageddon if the debt ceiling is hit and JP Morgan Chase CEO Jamie Dimon echoed that sentiment saying the bank has begun preparing for potential credit default.   Dimon does expect policymakers will address debt limit in time because failure to do so would be “potentially catastrophic.”

I’m not sure how much all those comments mattered to the market, but once the rally attempted fizzled, the market lurched into freefall mode.  For all the talk of growth taking the brunt of the damage, there were few places to hide out during the session.

Red Rum

The S&P 500 was down more than 2% for only the fourth time this year, on average this happens nine times a year.

Those mega cap names really stand out on the session taking big drubbings.

Energy was the lone winning sector as Technology and Communications Services were the biggest losers.

S&P 500 Index



Communication Services XLC



Consumer Discretionary XLY



Consumer Staples XLP



Energy XLE



Financials XLF



Health Care XLV



Industrials XLI



Materials XLB



Real Estate XLRE



Technology XLK



Utilities XLU



Market breadth was as bad as you would assume.

Market Breadth









52 Week High



52 Week Low



Up Volume



Down Volume



Keep in mind, back in March major indices hit their low points early in the month, even as yields kept rallying to the end of the month.  But I have to point out the yield is significantly above its 200-day moving average – a clear breakout.

There wasn’t a lot of talk about the Richmond Fed Manufacturing Survey, which slipped to contraction for the first time since May 2020

United States Richmond Fed Manufacturing Index

Portfolio Approach

Yesterday, we exited a position in Energy and Materials in our Hotline Model Portfolio.

TableDescription automatically generated

Today’s Session

Equity futures are fading from overnight high points.  The other reasons are all the confusion in Washington, DC where progressives are drawing lines in the sand and not accepting the syrupy talk of the old guard, which they did when their candidate was bumped during the primary process.

It’s one of the reasons I think Jay Powell’s job could be in trouble.  I would not be surprised to see the Fed chair sacrificed to get a smaller spending package through.  Yesterday, Senator Warren ripped him in front of the whole world calling him a “dangerous man.”


Betting markets see him down a lot in the past week.   These things are great sources for momentum more than actual results and right now momentum is going in the wrong direction.

I will say the street might have a Powell tantrum equal to the one many anticipated for tapering.  But his replacement would be a serious dove, keeping rates as low as possible, maybe even going negative, and the street would cheer that development.


Stocks of the Day

Netflix (NFLX)

Netflix: Squid Game and Netflix Stock, Dystopian is Additively Fun; Raising PT - The Benchmark Company (583.85)

"We maintain our Netflix Sell rating although we are increasing price target to $493 from $448 simply-off pushing realization to 2022. The continued negative view remains specific to Netflix and is not off broad tech/growth stock valuation anxiety, off long earnings duration, interest rate sensitivity, or strong dollar concerns."  Benchmark Company

Speaking of Dystopia, what is your favorite Dystopian movie of all time?  I agree with this piece from Paste. 

The 50 Best Dystopian Movies of All Time



  1. Blade Runner (1982)

Supply Chain Issues

Sherwin Williams (SHW)

Lowered its current quarter and full year guidance citing “the persistent and industry-wide raw material availability constraints and pricing inflation we have previously reported have worsened, and we do not expect to see improved supply or lower raw material pricing in our Q4 as anticipated.”

Chip Issues

Micron (MU)

Earnings just so-so but guidance below consensus

Revenue $8.27 billion consensus $8.21 billion

Earnings $2.42 consensus $2.34

Cash Flow from Operations $3.88 billion consensus $4.05 billion


Love this DISTOPIC list !!

charlie euston on 10/7/2021 10:30:38 AM

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