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Morning Commentary


By Charles Payne, CEO & Principal Analyst
10/18/2023 9:45 AM

Yesterday was one of the most impressive sessions I’ve seen in a long time. Major indices climbed off the canvas…twice.  

Seven of eleven sectors in the S&P 500 finished higher. Materials (XLB) led the way, followed by Energy (XLE) and Financials (XLF).

Consumer Staples (XLP) climbed higher as many are reconsidering the degree of selling based on miracle fat-loss drugs.

Technology (XLK) was the largest decliner after the Biden administration restricted specific Artificial Intelligence (AI) chips from being sold to China.

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Market Movers

Biggest Gainers

Many retailers were higher after the retail sales report came in better than expected. There are tons of names to sift through in the retail space. Take note of large non-money center banks that may have found a bottom.

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Biggest Decliners

The jig is up on the COVID shot, which made Moderna (MRNA) the largest decliner of the day, followed by NVIDIA (NVDA), whose products are so good that the United States wants to ensure China has no access.                                                                                                                                    

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Key Charts

Closing above 4,400 should trigger some panic buying, but the big upside test is 4,600.


The Russell 2000 looks attractive but needs to go through the trendline.


The Parabolic Bond Yield Ride

The ten-year bond yield erupted to 4.836%.

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The ten-year t-note yield has been in an uptrend for 146 weeks – the longest since the 1960s. This could be a long-term bond bear market.


No Time to Fret: Why I’m Bullish

I’m listing reasons investors should be ready to pounce on the market and not slink away. These are not in order of importance or influence.

Seasonality. After a rough patch in October, the market usually turns much higher. This is even truer in the third year of a presidential term.


The Fed has finished hiking rates:

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Valuations are attractive. Lots of money managers missed the rally this year, and they blamed, among other things, high valuations. Some would argue stocks still aren’t “cheap,” but this is the perfect time for them to get into the market so as not to miss the next leg higher.


A large chunk of the $5.7 trillion in money markets will find its way into the stock market.

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Corporate earnings are coming out of a recession and will pick up steam. Remember, earnings are the “Mother’s Milk” of stock rallies.


I’m incredibly confident stocks are oversold in general. The biggest threat is the Fed. It would be nuts, in my opinion, to bail on the market here.

Two biggies are reporting after the close, Netflix (NFLX) and Tesla (TSLA).


Today’s Session

Heightened tensions in the Middle East and negative reactions to earnings results from Morgan Stanley (MS) and United Airlines (UAL) have put the market on its back foot all morning.

All eyes on crude oil, which is edging higher, but the move is not matching geopolitical headlines (something about the lack of credibility as headlines have become weaponized these days).


There will be lots of Fed chatter today starting at noon.  

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