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Afternoon Note

Not Cooperating

By Charles Payne, CEO & Principal Analyst
1/14/2022 1:31 PM

The script was written, and the stage was set. But all of a sudden, the market isn't cooperating. The narrative that you must own Financials as the Fed hikes rates turned on its head today with disappointment from JP Morgan (JPM) and Citi (C).  Also, this year Real Estate Investment Trust were supposed to outperform based on upcoming interest rate hikes – but after two good days the sector has been sucking wind. 

So, this morning, buyers rushed back into growth stocks.  It's almost comical.  Right now, all the major indices are lower, but then again, so are bond yields, gold, and crude oil.

Technology is higher and Energy the biggest winner. 

S&P 500 Index

 

-0.40%

Communication Services XLC

 

-0.13%

Consumer Discretionary XLY

 

-1.06%

Consumer Staples XLP

+0.07%

 

Energy  XLE

+1.22%

 

Financials  XLF

 

-1.53%

Health Care XLV

 

-0.64%

Industrials  XLI

 

-1.15%

Materials  XLB

 

-1.52%

Real Estate  XLRE

 

-1.74%

Technology XLK

+0.35%

 

Utilities  XLU

 

-0.82%

 

One of the key characteristics of the market this year, and going into late 2021, is the late day swoon.  That's even more likely with the looming three-day weekend. 

One thing I always say about market drawdown and depressed periods is I prefer if it is harsh and fast, rather than long and drawn-out because:

A)      It’s going to take the market to where it wants to go, and we get there sooner

B)      It shakes out all the weak hands

C)      It creates oversold conditions

Yes, it’s painful, but you can even see today stocks turning higher and giving a glimpse they want to pop higher; just have to be ready to pounce.

Happy MLK Jr Day. The markets are closed on Monday.  See you next week.


Comments
Absolutely fabulous insight. Advice well taken.

Donald collins on 1/14/2022 9:56:18 PM
 

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