The market stumbled out of the gate last Friday on a combination of continued disappointment and problematic economic conditions in Europe, along with an order cancellation for Boeing (BA), and Nike (NKE) came up short against expectations for North American performance. Still, the market staged a solid rebound, which it often does during my show ‘Making Money with Charles Payne,’ but almost on cue, that rally stalled at 3:00 pm and a selling mounted, gathering steam into the close.
I suspect a lot of the selling had to do with scuttlebutt that the long-awaited Mueller report would be released. After two years of most of the media saying the report would trigger an automatic call for impeachment, and even a constitutional crisis, the market closed at the low of the session.
Here are the key technical parameters for the Dow Jones Industrial Average:
Support
- 25,296
- 25,014
Resistance
- 25,720
- 26,090
It will be interesting to see how the Mueller investigation impacts the market today. I think there will be something of a relief, even as the media and political pundits seek a new narrative to attack the White House. Their reputations took big hits, and their efforts won’t be taken as seriously as Robert Mueller.
Beyond that news, the market will turn back to issues from inverted yield curves, a slowing global economy, and the upcoming earnings season. The message of the market was the same as always in panic situations. There isn’t anywhere to hide, although some are better for riding out the storms than others.
S&P 500 Index | -1.90% |
Communication Services (XLC) | -1.61% |
Consumer Discretionary (XLY) | -1.98% |
Consumer Staples (XLP) | -0.13% |
Energy (XLE) | -2.70% |
Financials (XLF) | -2.76% |
Health Care (XLV) | -1.82% |
Industrials (XLI) | -2.26% |
Materials (XLB) | -2.98% |
Real Estate (XLRE) | -0.47% |
Technology (XLK) | -2.36% |
Utilities (XLU) | +0.72% |
Home Sweet Home
Home builders were a bright spot on Friday and have been intriguing for weeks. Buyers flocked to home builders after a very strong report on existing home sales. Home builders have looked attractive for years, but have disappointed, too. We are looking into them, but there isn’t a sense of urgency.
Existing Home Sales Highlights:
- Annualized rate of growth 5.51 million +11.8% month-to-month
- Highest level in eleven months
- Biggest one-month gain since December 2015
- First-time buyers: 32% from 29% month-to-month
- Days on market: 44 from 49 month-to-month
- On market less than one month: 41%
- Range $100,000 to $250,000 +0.0% from -22.5%
- Range $250,000 to $500,000 +4.41% from -1.1%
Portfolio Approach
Communication Services 1 | Consumer Discretionary 4 | Consumer Staples 1 |
Energy 1 | Financials 1 | Healthcare 2 |
Industrial 3 | Materials 3 | Real Estate 0 |
Technology 2 | Utilities 0 | Cash 2 |
Today’ Session
Keep an eye on Apple (AAPL), which has a big reveal that doesn't seem so big, but it will add intrigue to the streaming world and how the wars are shaping up. A downgrade on a couple of key semiconductor names means tech needs new leadership today.
Streaming & Content Players | YTD | 1-YR | 5-YR |
AAPL | +21.1% | +13/2% | +151% |
NFLX | +34.9% | +17/7% | +522/5% |
T | +8.9% | -9.4% | -12/2% |
We are also watching Boeing (BA), which was slammed under early support landing the stock at new lows. Now $365 is key resistance for the stock, which faces a lot of embarrassment this week from around the world and faces congress on Wednesday. Management can handle the criticism, but not more cancellations.