Consumers Are Primed And Ready

Although the market closed lower, you have to look at the internals and see the session was rougher than major equity indices would suggest.  Losers outpaced winners two to one on the New York Stock Exchange and were 50% more on the NASDAQ Composite.   Overall volume was light but skewed negative. 

Market Breadth

NYSE

NASDAQ

Advancing

998

1,377

Declining

2,048

2,062

52 Week High

100

152

52 Week Low

17

20

Up Volume

935.58M

1.64B

Down Volume

2.78B

1.92B

The session wasn’t a disaster, especially on the heels of big moves made this month.  There just was never any leadership, as Communication Services was the lone winning sector on the S&P 500.

S&P 500 Index

 

-0.63%

Communication Services XLC

+0.10%

 

Consumer Discretionary XLY

 

-0.02%

Consumer Staples XLP

 

-0.08%

Energy XLE

 

-1.55%

Financials XLF

 

-1.92%

Health Care XLV

 

-0.76%

Industrials XLI

 

-1.11%

Materials XLB

 

-0.89%

Real Estate XLRE

 

-1.70%

Technology XLK

 

-0.64%

Utilities XLU

 

-0.69%

Hotline Model Portfolio Approach

This morning, we are adding to Industrials in our Hotline Model Portfolio.

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Today’s Session

Bank earnings have largely been a yawner again, save for Goldman Sachs (GS), which posted results that are hard to ignore.

Bank Earnings

Goldman Sachs (GS)

  • Revenue $10.7 billion consensus $9.4 billion
  • Earnings $9.68 consensus $5.50

PNC Bank (PNC)

  • Revenue $4.48 billion consensus $4.01 billion
  • Earnings $3.39 consensus $2.11

Wells Fargo (WFC)

  • Revenue $18.86 billion consensus $17.87 billion
  • Earnings $0.42 consensus $0.48

Bank of America (BAC)

  • Revenue $20.3 billion consensus $20.88 billion
  • Earnings $0.51 consensus $0.50

CPI informs investing

September Consumer Prices increased 0.2% from August resulting in the lowest read in four months.  I wrote last month in the commentary, and more detailed in Payne’s Perspective, of how investors should use this report to discover investing ideas as much as a gauge on inflation.

To see the chart, click here.

The biggest increase came in used cars and trucks, and on the other end of the spectrum, we were struck by the sharp decline in prices for appliances.

To see the chart, click here.