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Morning Commentary


By Charles Payne, CEO & Principal Analyst
11/9/2022 9:37 AM

Yesterday, ten of eleven sessions were higher as Consumer Discretionary (XLY) was weighed down by Tesla (TSLA) and Domino’s (DPZ) Pizza.

Technical View

It was a wild session that traded in a narrow range but gave investors a scare. It’s hard to blame a single issue for tripping up the rally as a combination of cryptocurrency disaster, and poor bond auction might have derailed the effort. It’s a sign of how vulnerable the stock market has become, even when it seems clear sailing.

The S&P 500 is holding above the October low and closing in on the huge test of resistance at 3,900.  Through that point, the index could move swiftly to fill the gap at 4,050.

Crypto Disaster

Bankman-Fried is being called the next Warren Buffett is the ultimate curse, and it’s slain another victim.  To be fair to Fortune, they were smart enough to add in the corner: ‘or crash and burn.’

94% of Fortune Wiped Out

While the saga itself is still unfolding, Sam Bankman-Fried has taken a record loss unlike any I can recall.  You cannot even imagine how many lives that kind of money could have helped. Ironically, Bankman-Fried has stated he wanted to give away his fortune eventually…but not like this.

Corporate Woes

Disney (DIS) missed big time and paid a huge price in after-hours trading.

There were lots of additional earnings misses met with crushing blows. As a result, many hot stocks in 2020-2021 have been annihilated. I haven’t seen anything like this except for a few stocks that went out of business in the aftermath of the tech crash. 

Investors are moving into old strong names as they flee the pipedreams and makeup worlds of tomorrow.

Portfolio Approach

We added a position in Real Estate yesterday to our Hotline Model Portfolio.

Today’s Session

Turns out the red wave continues to be in the stock market and more and more in the economy.

We finally got a headcount on the number of job cuts at Meta and it’s a doozy:

At 13% of workforce, the Meta layoffs are actually at the lower end of the spectrum.

But these cuts could be just the beginning. The news is lifting shares of Meta. But overall, the market is sagging after rallying on a slight chance the GOP would gain control of the House and Senate, which could have turned around some key issues like oil drilling.  As it stands, it appears the GOP will have a slim edge in the House, which should be enough to stop more excessive spending plans.

Now it’s back to data –watching and waiting for the CPI report tomorrow.  No matter the number, its clear the market is looking at history for results under recessionary conditions.  That brings a whole new debate/question – how deep?


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