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Morning Commentary


By Charles Payne, CEO & Principal Analyst
1/18/2023 9:43 AM

Yesterday, the S&P 500 traded in a very tight range all session, bouncing from small gains to small losses before settling fractionally lower. The session was doomed when Goldman Sachs (GS) laid that giant egg, but the chart formation was beckoning. The reverse head and shoulders formation is a reliable bullish formation.

It was an eclectic leadership board with Elon Musk riding high at the top.

Heat Map

The Heat Map was more crimson than most sessions this year, with Tesla (TSLA) standing way out from the crowd.

And only four sectors were higher on the session, but Technology (XLK) was at the top of the list.

Chips Ahoy

VanEck Vectors Semiconductors ETF (SMH) was the best-performing industry group inside the Technology (XLK) sector. The SMTF has rallied seven straight sessions.

Longer-term, SMH climbed above the key trendline that was resistance and held as support. There is a lot of room from this point to the next test of resistance.

Lots of Economic Data

There is a ton of economic data out today. The Producer Price Index (PPI) might be the most influential, but all the data is relevant. It’s going to be interesting to see reactions to data that come in below the consensus estimates. Will bad news be good news?

Retail Sales

Yesterday, the CFO at Goldman Sachs said they're seeing early signs of consumer credit deterioration. At the same time, excess savings is fading quickly.


Portfolio Approach

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Today’ Session

Retail sales -1.1% month to month, missing consensus by -0.9%.

Nominal +5.2% from a year ago, but when adjusted for inflation -1.2%.

In nominal numbers, only three sectors saw gains.

But when adjusted for inflation, we still spent lot of money on at gas stations, general merchandise and hobby stores.


Producer prices came in below consensus across the board with the monthly decline -0.5%, the biggest since April 2020.

Before data releases

The street was looking for two rate hikes and later two rate cuts before this morning’s data – we’ll keep watching.

Meanwhile, the Ten-Year bond yield at very critical support point at 3.40%


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