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Morning Commentary


By Charles Payne, CEO & Principal Analyst
8/25/2022 9:47 AM

It was another quiet day yesterday, but a lot of positioning is going on as we creep closer to the Jackson Hole Economic Symposium. Each sector finished the day higher (Technology (XLK) was unchanged), with Energy (XLE) moving it into a higher gear.

Small-cap growth continues to outperform small-cap value.

Small-cap growth looks very attractive to bottom-fishing traders and long-term investors. Of course, there is a fair amount of work to call it a sustained reversal (170), but it’s compelling. Meanwhile, the Russell 2000 (IWM) held a very pivotal point and could turn higher.


Don’t look now, but the oil rebound is picking up steam. West Texas Intermediate (WTI) closed right at a key swing point that could serve as a major breakout point.

As for oil stocks, they are way ahead of crude, which has been rare; looking at the chart, it’s hard to imagine XLE will not continue to edge higher and retest the high.

The student debt forgiveness announced yesterday is bad news for a nation grappling to remain moored to our original ethos of hard work and repaying our debts. It’s also bad news with respect to the ongoing battle to bring down inflation. The odds of a 75-basis points (bps) hike popped after the announcement.

GDP Lower

It’s early, but we’ve seen this movie before where the Gross Domestic Product (GDP) forecast begins higher and quickly sinks lower.

Are three consecutive quarters of a negative GDP a recession?

Hey, National Bureau of Economic Research (NBER), I’m asking for a friend.

Today’s Session

Revised GDP -0.6 from initial read of -0.9% - but it is still back-to-back negative quarters.

Strength in consumer spending and a rebound in exports are going to be far less impactful for the current quarter. Although, we never stop spending until we’ve exhausted all our resources or think tomorrow, we’ll get a better price (deflation), which could be the case, as the economy begins to pick up sped to the downside.

Jackson Hole begins today with a lineup of Fed.  But all eyes are on what happens tomorrow with Jay Powell and his biggest speech of his tenure as Chairman of the Federal Reserve.

Per-opening action has been listless, as the anxiety in the air is so thick you could cut it with a knife.

Hope everyone has some cash to take advantage of potential wild gyrations in the next 36 hours. If you are not a current subscriber to our Hotline Service, email Info@wstreet.com to get started today. 


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