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Morning Commentary

Fed Watch

By Charles Payne, CEO & Principal Analyst
6/15/2022 9:40 AM

Well, the market did not rally into the close, as I thought it might, but the Nasdaq did manage to eke out a small gain.  Treasuries pressured the markets as the 2-year rose to 3.43% and the 10-year climbed to 3.48%, a 16 and 12 basis point rise, respectively.  The CME’s Fed Watch now shows a 96.6% likelihood of a 75 basis point rate hike today and a 95.8% chance for another 75 basis points in July.

There wasn’t much green on the screen other than a few mega cap names. 

Only 2 of the 11 S&P 500 sectors managed to cross the finish line in the green.  Technology was helped in part by Oracle (ORCL), which had a good earnings report and raised its guidance.   Energy, while finishing slightly in the green, was much higher on day (+3.2%). Oil prices pulled back below $120 a barrel and natural gas, which has been on fire, declined by 15%, as now concerns have switched to excess supply.

S&P 500 Index

 

-0.40%

Communication Services XLC

 

-0.28%

Consumer Discretionary XLY

 

         -0.25%

Consumer Staples XLP

 

-1.29%

Energy XLE

   +0.07%

 

Financials XLF

 

-0.94%

Health Care XLV

 

-1.06%

Industrials XLI

 

-0.25%

Materials XLB

 

-0.84%

Real Estate XLRE

 

-1.01%

Technology XLK

+0.62%

 

Utilities XLU

 

       -2.58%

There was good news from FedEx, which was up 14.4% on its announcement of a 53% hike in its quarterly dividend as well as the appointment of 3 new directors. This helped the lead the Dow transports higher.

Decliner outpaced advancers almost 2-1 on the NYSE, but the new lows are still staggering.

Market Breadth

NYSE

NASDAQ

Advancers

1,242

2,015

Decliners

2,071

2,714

New Highs

4

15

New Lows

850

1,020

Up Volume

2.09 billion

2.34 billion

Down Volume

307 billion

2.32 billion

Portfolio Approach

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

Today’s Session

Retail sales for May came weaker-than-expected -0.3% vs. consensus +0.1%. Prior month was revised downward to +0.7% from +0.9%. The decrease in retail sales suggests that surging prices might be taking their toll on real consumption. 

May Monthly Sales Retail & Food Services

M/M

Y/Y

Headline

-0.3

+8.1

Motor Vehicle & Parts

+0.5

+11.2

                             Furniture                                

-0.9

+1.9

Electronics

-1.3

-4.5

Building Materials

+0.2

+6.4

Food & Beverage (at home)

+1.2

+7.9

Health & Personal Care

-0.2

+4.8

Gas Stations

+4.0

+43.2

Clothing

+0.1

+6.1

Sporting Goods

+0.4

-0.2

General Merchandise

+0.1

+2.5

Department Stores

+0.9

+0.9

Internet

-1.0

+7.0

Food & Beverage (away from home)

+0.7

+17.5

Sector Highlights (prior month)

All eyes are on the Fed today and the futures are pointing to a positive open, for now.  Oil and yields are lower.

Comments
Watch housing. It isn't just the house. It's the appliances, kitchen ware, furniture, tools and the new car to park in the new garage. Our economy is slowing down.

Farmer on 6/15/2022 10:26:00 AM
 

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