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6/27/2022 10:01:46 AM Eastern Time

AND THE LAST SHALL BE FIRST (SOMETIMES)
By Charles Payne, CEO & Principal Analyst

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What a wonderful session last week, as it capped off the first up week (in five weeks) that investors’ fear of the Fed ‘going too far’ abated, and buyers were eager to pounce to make their move. This time, a few other fence-sitters joined along. For the week, however, market breadth was horrible and the down channels were still firmly in place.

Mega-cap names soared on Friday.

Reopening Trade Takes Off

But folks looking to make a quick buck moved swiftly into reopening trades. The thing is they have been so beaten down that you might still be in a paper loss unless you bought midweek.

There was also a smattering of oversold disappointments that were higher as well, including Wells Fargo (WFC) and Salesforce (CRM). But, of course, several perennial favorites are bound to work sooner or later, right?

Today

Watch those names that are supposed to join the Russell 1000:

• META (FB)
• Netflix (NFLX)
• PayPal (PYPL)
• Zoom Video Communications (ZM)
• Pinterest (PINS)

I think this is a brilliant move. However, it says a lot about how some of the mighty have fallen and how some of the contenders have fallen short.

For more information on these and key sectors, ask for a copy of Payne’s Perspective – contact your rep or research@wstreet.com.

Take that to the Bank

And look for a bunch of buybacks and dividend hike announcements from banks. The S&P Financial (XLF) sector has been an unmitigated disaster. 

Everyone on Wall Street loved the trade on January 1^st, just like they seem to love it every January 1^st of any year.

There is a lot of work to do to reverse out of its down channel. But there might be some trades and even a couple of names that will sustain moves – but there is no urgency to make that determination.

XLF

Portfolio Approach

We are adding a new position in Consumer Discretionary in our Hotline Model Portfolio.

Today’s Session

Durable goods for May came in above consensus and that “good” news took a little starch out of premarket trading.

I’m not sure it should matter that much, and I’m glad to see businesses are investing, despite abysmal sentiment readings.

The news sent bond yields slightly higher, keeping the trend of higher lows intact and holding above that now magical 3.00% support point.

Long Idea: Chipotle Mexican Grill, Inc. (CMG) @ $1,349.15
Industry: Consumer Discretionary; Restaurants
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BACKGROUND: Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. As of February 15, 2022, it owned and operated approximately 3,000 restaurants in the United States, Canada, the United Kingdom, France, Germany, and rest of Europe. The company was founded in 1993 and is headquartered in Newport Beach, California.

SKINNY: CMG recent pullback represents an opportunity. In the past five years, CMG has delivered impressive growth in revenue and profits, supplemented with improvement in operating and gross margins. The company has ambitious plans to more than double its restaurants counts from 3,000 to 7,000. Overall, CMG as outperformed its peers and the S&P 500 in the last five years. Our target $1,603.