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Morning Commentary

Revving Up

By Charles Payne, CEO & Principal Analyst
11/11/2021 9:32 AM

Investors took more chips off the table yesterday in many of the growth and mega cap names and parked the money in defensive sectors Utilities, Health are and Consumer Staples. 

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Energy was the hardest hit sector as a bearish inventory data report dragged down WTI by 3.0% to $81.23 a barrel.

S&P 500 Index

 

-0.82%

Communication Services XLC

 

-1.13%

Consumer Discretionary XLY

 

-0.37%

Consumer Staples XLP

+0.30%

 

Energy XLE

 

-2.64%

Financials XLF

 

-0.17%

Health Care XLV

+0.29%

 

Industrials XLI

 

-0.56%

Materials XLB

 

-0.68%

Real Estate XLRE

 

-0.50%

Technology XLK

 

-1.65%

Utilities XLU

+0.81%

 

 

Breadth was decidedly negative, and down volume vastly exceed up. However, there were more new 52 week highs on the NYSE.

Market Breadth

NYSE

NASDAQ

Advancing

1,068

1,315

Declining

2,299

3,336

52 Week High

143

124

52 Week Low

38

132

Up Volume

1.58B

1.52B

Down Volume

2.91B

3.74B

Off to the Races

Electric Vehicle (EV) stocks are zooming higher this morning,  buoyed in part by the enthusiasm over Rivian (RIVN), which debuted yesterday at $78.  Shares took off and rose almost 50% before closing at $100.74, up 29%,  giving the company an $86 billion market cap. 

Rivian set aside 7% of its IPO shares for its directed share program (DSP).  As part of the program, customers who had a deposit down on either an R1S or an R1T electric truck as of September 30, 2021, were eligible to purchase up to  175 shares at the $78 IPO price, or a maximum investment of $13,650.  Shares are indicating up another 6%.

Tesla (TSLA) shares also rose 5.5% yesterday.  Elon Musk sold close to $5 billion in TSLA stock on Tuesday and Wednesday. This was part of the 10% stake he said he would sell and use a portion to pay the tax on the TSLA stock options he exercised. Musk polled his fans and investors on Twitter this weekend, asking them if he should sell.  The majority of people surveyed were in favor. 

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TSLA is looking to 3% more this morning.

Portfolio Approach

We took profits in Consumer Discretionary yesterday in our Hotline Model Portfolio.

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Today’s Session

Futures are pointing to a higher open across the board.  Earnings continued to roll in and investors again rewarded winners and inflicted hard punishment on those that miss. 

Disney (DIS) stock is a prime example.  DIS had a disappointment quarter, missing on both the top and bottom line, as streaming subscription were lower than expected.  The stock is down over 6% this morning.  

Seems the appetite for fake meat is waning.  Beyond Meat (BYND) shares are down a 18% after reporting worse-than-expected Q3 EPS and sales results. The company issued Q4 net sales guidance below estimates.

We featured some short squeeze names this week. Lots of folks bought Big 5 Sporting Goods (BGFV), and it is up huge.  Ironically, it has not had the classic climactic short squeeze session yet.  Nonetheless, would take half of the position off the table.

We are not going to force the issue this morning, but we are looking at sizzling niches, such as chips and Saas.

The bond market is closed today in honor of Veterans Day.  We want to thank the countless men and women along with their families for their service and their sacrifice.  We salute you. God bless you and God Bless our great nation.


Comments
Thank you for your Service! And your continued service to Military and Veteran families.


Donnie Pennock on 11/11/2021 10:10:09 AM
Thank you for your service Charles and all of the great information that you share here and on FBN.

Timothy Oubre on 11/11/2021 10:11:03 AM
Charles and Team, Go Veterans! We do make a difference after our service and we all help each other and society...

JB on 11/11/2021 10:35:28 AM
Charles,
As a fellow AF brat, enjoy your Veterans Day!
Bob

Bob Pinard on 11/11/2021 10:54:29 AM
The greatest Brotherhood comes from having served. Thanks to my fellow Vets and God Bless You ALL!

Duncan Ferguson on 11/11/2021 11:43:47 AM
 

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