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Morning Commentary

CANíT SHAKE THAT INFLATION FEELING

By Charles Payne, CEO & Principal Analyst
6/9/2022 9:35 AM

I know I sound like a broken record, but yesterday was another session of light volume, better market breadth in general, but especially new highs over lows on the New York Stock Exchange (NYSE).    

Market Breadth

NYSE

NASDAQ

Advancers

839

1,974

Decliners

2,373

2,598

New Highs

91

50

New Lows

51

124

Up Volume

1.38 billion

2.23 billion

Down Volume

2.74 billion

2.43 billion

Also, Energy (XLE) was higher, and everything else was down, including Real Estate (XLRE), which was slammed.

Heat Map

There’s oil companies and Tesla (TSLA), and then there’s the rest wallowing in a sea of red.

S&P 500 Map

The forward price-to-earnings (F P/E) ratio points to some unlikely “value” stocks, such as Apple (AAPL) and Microsoft (MSFT).

S&P 500 Map

Watching Commodities

What if I told you back on November 4, 2020, that you would want to load up on fossil fuels and commodities and avoid solar and wind energy investments?

The toll it's beginning to take on the nation goes beyond economics. 

The American public is crying, “Uncle, we give.” 

Meanwhile, late yesterday, the White House told everyone to brace for inflation numbers, which will be released on Friday, to be “elevated.” it’s not just gasoline but food and so many other things.

Demand Destruction Taking Longer to Kick In

Image

Portfolio Approach

There are no sector weighting changes this morning to our Hotline Model Portfolio.

Today’s Session

I’m not sure what happens today with so much focus on the CPI report tomorrow.  Equity futures were higher but have drifted lower.

I sense we could get buyers into the close betting on a more subdued inflation read in the morning.

This market needs a boost or the tide will shift back to a call for a re-testing of recent lows.


Comments
Looks like we are going to be holding a lot of long positions for a looongggg time! Biden's administration including the FED are a train wreck.

Bruce Hongsermeier on 6/9/2022 9:38:50 AM
I missed the headline re; WH "brace for inflation #'s" comment. I'm not surprised as I have previously mentioned that I did not believe inflation peaked in March. We'll see if I was correct in my prognosis tomorrow. As far as Nov. 2020 and XLE....Those of us that are long time owners of XOM, CVX, & such, had and have decent exposure to XLE and have had that exposure act as an offset to unrealized losses in other sectors. RE: New Hi's vs New Lo's...Not unexpected if we are experiencing a bounce before another leg lower, as I suspect. I need to see those numbers on above average vol. before I can be confident in their predictive value.

Charles Haselberger on 6/9/2022 10:04:09 AM
 

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