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Morning Commentary


By Charles Payne, CEO & Principal Analyst
6/26/2024 10:01 AM

-LL Cool J

I don’t think anyone thought Tech was down for the count, but it has shown it can be touched. For now, a cadre of would-be buyers lined up, which means it’s still rocking its peers.

It's all about momentum – chasing new highs of shallow dips - a great strategy until it isn’t. But even momentum-chasers get antsy from time to time. Right now, there is a move to find the next tier of potential rocket ships. Constellation Energy Corp (CEG) and Hewlett Packard Enterprise (HPE) are on that list.

Meanwhile, investors must decide if they can deal with swings that add and subtract hundreds of billions of dollars in market capitalization almost on a whim. When my ideas are down more than 10%, I must go to great lengths to hold hands (the part of this business I am most proud of).   

One Punch Knockout

Other stocks are making big moves in the market, but it's been about the punching power of one stock. Meanwhile, the market remains nasty, with far more decliners than advancers on the New York Stock Exchange (NYSE) and the NASDAQ Composite.

Market Breadth









New Highs



New Lows



Up Volume

1.04 billion

2.50 billion

Down Volume

2.46 billion

2.25 billion

Even with the skewed breadth, this is the best presidential election-year rally ever. It's easy to argue that the market is overbought on a near-term basis, but names are languishing. It's far-fetched to call them overbought.

Unfair and Meddling

Midcaps have become popular trades for value-hunters over the past month. Yesterday, the SPDR S&P MidCap 400 ETF (MDY) slipped into a short-term downside bias.

The MDY finished the session just below the 50-day moving average – the 200-day moving average is a long way down.

Today’s Session

I’m not liking the news from corporate America. General Mills (GIS) is getting hammered on results and guidance. Even with lower prices, there was a sharp decline in volume. People are tapped out.

Along with Southwest Airlines (LUV), which sees RASM in range of -4.0% to -4.5% from prior guidance +1.5% to +3.5%.

FedEx (FDX) beat on the top and bottom lines and offered solid guidance, but that probably has more to do with their competitive advantage over United Parcel Service (UPS), which moved too quickly to succumb to union pressure during the supply chain crisis.

FDX is the number 5 weight in the Dow Transports and LUV is number 10, so the index may hold. But relative to the S&P 500, it’s been sending a signal of dread for quite some time. The Federal Reserve needs to gather more information from fresher sources on the economy.

Charles your wit is awesome. You are the GURU of Finance too.

Tom Connors on 6/26/2024 10:13:48 AM
Your election year chart makes it look like its good to be out from late August - October and then back in right at the election time?!?

brian on 6/26/2024 11:00:58 AM

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