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Market Commentary

Grappling The Narrative

By Charles Payne, CEO & Principal Analyst
6/28/2024 12:50 PM

It was a mixed morning of economic data and there is a compelling reaction across the market.

The PCE release came in as expected and asset classes began to move according to the script.

Then, the Chicago PMI release came in much hotter than expected. After a disastrous string of missing consensus in eight of the last nine months, there was a monster spike.

The 47.4 print was substantially higher than the consensus of 39.7, and 35.4 in May (a four-year low).

Suddenly, the ten-year yield reversed and began to edge higher, and the equity rally also began to fade.

I think I’m missing something.

Bonds (TNX)


Stocks (SPX)





Meanwhile, the Atlanta Fed lowered its Q2 2024 GDP estimate to 2.2% from 2.7%, driven by a sharp reduction in PCE to 1.8 from 2.5.

I suspect the focus is moving to a consumer that is slowing down and becoming defensive.  Savings moved to 3.9%, after bottoming in March at 3.5%.

The Consumer is Tapped Out

I continue to say the consumer is tapped out.  Sure, they have cash to buy stuff, but the splurging is over.  Nike (NKE) is getting crushed today -19.0%. 

While Nike (NKE) bills itself as a “growth” company, sales in North America were down during the quarter.

The market is grappling with the narrative today.  Its harder to say if the consumer and economy are strong, or if the Fed will step up to the plate any time soon.

Charles I think the retail investor is smarter than in the past and know if they get greedy and jump "all in" the institutions will burn us. Therefore we keep more cash. Myself I rarely let my cash position go below 20-25%. I am ok with missing on the upside a bit and I think others are the same hence the 6 trillion in cash. Cash on hand gives options if the market goes up or down.

James Wernecke on 6/28/2024 2:10:09 PM

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