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Morning Commentary


By Charles Payne, CEO & Principal Analyst
10/18/2021 9:33 AM

It was a great week for the market – not so much the total gains, but how stocks found a way to fend off skittishness that triggered significant closing selloffs. On Wednesday, the market finally turned. Thursday, the S&P 500 pierced the 50-day and closed at the high of the session, and on Friday, the move continued. Financials (XLF) rocked on continued strong financial results, and money came out of defensive names.

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



Individuals Feeling More Bullish, but Wall Street Bet on a Dip

Investors are less fearful, and that’s fine. In fact, there has been a lot of betting on a big move lower by big money traders who have loaded up on inverse exchange-traded funds (ETFs). Historically, double-digit bounces in the American Association of Individual Investors (AAII) bullishness is a good sign for the market over the next two weeks.



Consumers More Guarded: Blame Inflation

As we’ve seen with that huge retail sales beat, Americans have the cash and are willing to spend, but their anxiety is palpable.


If there isn’t a break in inflation soon, households will shift from hoarding toilet paper to hoarding two trillion in savings. I suspect folks will keep spending, especially with Christmas around the corner.

Consumer sentiment drops near pandemic low, inflation outlook rises

Now, they just have to hope what they are looking for is in stock.

Portfolio Approach

We took profits on a position in Industrials on Friday in our Hotline Model Portfolio.

Today’s Session

Stocks in general are looking to open lower ahead of an avalanche of earnings, including 72 S&P 500 components.

The most important might be Netflix (NFLX) and Tesla (TSLA), as these momentum darlings have inspired much new buying in the market over the past few years.

Beyond those names, there is an eclectic mix of names from all sectors that could help shape a comprehensive view of where the US economy is heading, especially with respect to supply chain issues.

Covid19 lockdown winners like POOL could also give insight on how much changed behavior will carry on past the pandemic and lockdowns.

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Container rates are coming down and that’s great news.


This morning we learned General and former Secretary of State Colin Powell passed away from complications from Covid19.

He was a major influence on the world and for me personally.

RIP General Powell

And our good General Powell. Could have been a great president, much better than the one he served, Bush and the three he supported; Obama, Clinton, biden. Important note, he was fully vaccinated.

Lorin K on 10/18/2021 11:58:58 AM

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