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Morning Commentary

Is the Dip Done?

By Charles Payne, CEO & Principal Analyst
11/17/2017 9:08 AM
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The market answered those whispers of doubt and concern that perhaps the rally was over, or ready to yield for a 5% pullback or a 10% correction. 

Those moves can happen. In fact, the fundamental building blocks of the rally are only getting stronger. 

There is no doubt that a part of Thursday’s session was Wall Street applauding House Republicans for getting the job done. Investors and would-be investors must understand that economic trends continue to improve, and they continue to justify this market going a lot higher from where it is now.

Economic Data

In addition to an impressive and encouraging Industrial Production and the House Market Index, Capacity Utilization came in above Wall Street consensus, reflecting an economic momentum. It is also a reminder of how much room there is for life, and the United States should realize its output potential.

I continue to say the wheels of the economy are moving; while lower taxes would give it a boost, I don’t think it would derail the economy or the market beyond a brief pullback.

Of course, we want to see it happen for the tide of prosperity to rise higher and wider.

Earning Fuel Rallies

By the way, there is another factor that explains why stocks go up and down: corporate earnings; after the bell, several companies from various industries posted results-most of them posted strong revenue and earnings growth.

Retail Comparable Sales Impress:

Comp-Store Sales

Actual

Estimate

ROSS

4.0%

1.8%

GPS

3.0%

1.0%

WSM

3.3%

3.0%

 

Tech Results

Applied Materials (AMAT) saw revenue and earnings that beat the Street and management continues to be confident. The stock is up 81% this year, 464% over the past five years –no one ever talks about AMAT.

Splunk Inc. (SPLK), which I featured on my show numerous times, is rocking after posting results at the close. The company beat and guided higher for the quarter.  Although the stock is already up 51% this year, it is poised to rocket out the gate this morning. 

Today’s Session

Brick and Mortar Stocks Are Rocking!

Earlier this week, the Retail Sales report saw surprising strength in sporting goods.  This morning, Footlocker (FL) is soaring (will be up 30% this week).  This is by no means the only retail winner today.

Other Brick and Mortar Grand Slams Today (aided by massive short positions) include:

I think brick and mortar is still a proxy of sorts of Main Street even as more and more people shop online.  The only loser in brick and mortar this morning is William Sonoma, which caters to rich folks. 

Amazing news on housing this morning with starts and permits coming in much better than anticipated.  We’ll have details on the afternoon note.


Comments
You don't get at least a 10-20% pullback, the rally will be hollow...They will all be in with scared money, instead of buying with both hands....It's got to happen for the health of the market....

gregg paucek on 11/17/2017 11:54:20 AM
 

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