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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Confidence On The Sidelines - By Dominique Paul,

    The major equity indices at first sported reversals from session lows. However, the Dow Jones Industrial Average and the S&P 500 struggled to remain in the green. Ultimately, the NASDAQ continued to trend higher as the other two indices returned to the red. This morning, the Bureau of Labor Statistics released its quarterly report on wages, the Employment Cost Index, for Q2-2015. Sequentially, the index rose by a mere 0.2%. On a year-over-year basis, wages actually increased by 2.0%, significantly lower than the 2.6% gain observed in Q1-2015. We also had a few other economic releases this morning.

    The University of Michigan released its final reading on consumer sentiment for the month of July. During the month, the index fell to 93.1 from a mid-month reading of 93.3, and a final June reading of 96.1. Consumers are less confident about the future as the expectations component index decreased significantly to 84.1 from 87.8 in June.

    For the month of July, the Chicago Fed District released some positive news. The industry saw its business barometer index jump to 54.7 in the month, from a reading of 49.4 in June. This is huge news as the Chicago District has seen contractions in 4 out of 5 of the past few months. Expansion is due to gains in new orders and production. However, backlog, supplier deliveries, and employment remained down for the month. Still, prices paid rose to 54.5 during the month, the highest reading since December 2014. Ultimately, the report is a good sign for the broad US economy.

    Jul 31 2:27 PM | Link | Comment!
  • Tempting Bait - By Charles Payne, CEO

    I'm not taking the bait, but love the action today, in part, because of the pieces:

    • Industrial names are up on stronger earnings
    • Oil stocks are holding and many have turned higher
    • Transportation stocks are acting pretty good

    I'm also impressed the market didn't collapse like a house of cards early in the session when the first rally attempt failed. There's a way to go, but the market isn't so overpriced it should crash. In the meantime, there have been so many individual losers and sectors that are beyond pullback levels and already entered into correction territory… we can argue the market is oversold.

    Let's hold tough. We've made difficult decisions, taking more losses than normal. We have cashed in a lot of positions, so everyone should have cash and should be ready to make aggressive moves to buy the next leg higher.

    Consumer Life Line

    By Dominique Paul, Research Analyst

    The three major equity indices are sporting nice intraday reversals off of session lows, especially the NASDAQ which danced in negative territory for while after the market opened. The Federal Open Market Committee (FOMC) is currently gathered for its 2-day meeting. Tomorrow, the FOMC is scheduled to release a statement regarding its plans for interest rates at 2:00 PM. As for today, we had a few domestic economic data releases.

    The S&P Dow Jones Indices released its Case-Shiller Home Price report for the month of May. In this specific report, we focus on the on the 20-City Composite. Year-over-year, the 20-City Composite increased by 4.9% in May after rising by an upwardly revised 5.0% (from 4.9%) in April. The composite currently stands at 179.03. This is the highest level since January 2008 where the reading was 180.68 for the month. Month-over-month, the index actually decreased by a seasonally adjusted 0.2% after remaining unchanged in April. Chicago saw the greatest monthly price decrease of 0.9% after falling by 0.5% during the month of April. Detroit and San Francisco tied for the second greatest monthly price decrease, both indicating 0.5% lower in May. Miami was quite the opposite as it saw prices rise by 0.5% in May. However, Las Vegas takes the cake for May with housing prices increasing by a monthly 1.0% after gaining 0.9% in April. Overall, we're seeing improvement in housing prices in major metropolitan areas which should translate to higher prices in surrounding neighborhoods. This bodes well for home builders as it shows demand for housing is improving.

    For the month of July, Markit released its flash services purchasing mangers' index (PMI) report. The service sector has seen well needed improvement over the past few weeks. The July flash reading came in at 55.2, 40 basis points higher than the June final reading and flash reading of 54.8. Higher consumer spending has pushed new orders in the services sector to three-month highs. While mangers in the service sector voiced concerns about the future of the global economy, they are seeing backlogs increase and are hiring more workers to meet demand. Ultimately, the service sector is moving in the right direction.

    Lastly, The Conference Board released its Consumer Confidence report for the month of July. Consumer confidence has taken a nasty fall. Currently, the index reads 90.9, down significantly from the downwardly revised June reading of 99.8 (from 101.4). When breaking down consumer confidence into current and future expectations, we're able to see that the global economy and jobs market weighed heavily on the minds of survey respondents. The present situation index fell to 107.4 from 110.3 in June. The amount of respondents that feel that business conditions are good fell to 24.2% from 26.1% and the amount of respondents that feel the amount of jobs are plentiful decrease to 20.7 from 21.3%. The only increase was in the amount of respondents that believe finding a job has gotten harder.

    As for the future, the expectations index fell dramatically. It now stands at 79.9, nearly 14% beneath the June expectation index level of 92.8. Unchanged from June, 17.9% of respondents feel that business conditions are bad. The amount of consumers who believe business conditions will improve over the next six months dropped to 14.7% from 17.9% in June. Also, while the amount of consumers who believe there will be more jobs created dropped to 13.1%, the amount of consumers that believe there will be fewer jobs rose to 20.0% from 15.2%. Perhaps consumers are being a little too pessimistic when considering the jobs growth in the services sector. Then again, manufacturing across the country has delivered mixed results. All in all, higher consumer confidence is vital for our economy to improve.

    Jul 28 2:09 PM | Link | Comment!
  • Down Across The Globe - By Dominique Paul

    Today marks the fifth consecutive session of the major equity indices trading in the red. The Dow Jones Industrial Average is a long way from its 52-week highs of 18,351, currently trading below 17,500. The NASDAQ is down almost 0.90% and the S&P 500 is down nearly 0.55%. Overseas, the major stock markets in Europe also closed significantly lower with Italy's MIB Index declining the most (-3%) followed by Germany, Ireland, and France each observing their indices close down 2.6%. China, which has been assigned most of the blame for our down market, saw its Shanghai Composite close down 8.48%. Foreign investors have been exiting shares of Chinese companies with great haste; since July 6th, they sold $7.6 billion worth of shares through the Hong Kong exchange. When looking at domestic data, the United States actually has a bit to celebrate.

    Earlier this morning, the Census Bureau released its durable goods report for the month of June. The amount of total new orders is on the rise. Month-over-month, new orders rose by 3.4%, surpassing the consensus estimate of 3.1%. May's new order estimate was revised lower to -2.1% from -1.8%, making June's come back even more impressive. When excluding transportation goods, new orders rose by 0.8% month-over-month following a downwardly revised -0.1% (from +0.5%) in May. We mostly care about non-defense capital goods excluding aircraft. This category is better referred to as business spending. During the month of June, business spending rose by 0.9% month over month after being on the decline in April and May.

    The Dallas Fed District released its manufacturing survey for the month of July. Dallas' general activity index improved slightly, coming in at -4.6 after rising to a revised -7.0 (from-7.6) in June and -20.8 in May. General production improved, as well, increasing to -1.9 from a reading of -6.5 in the prior month. Also, for the month of July, the Dallas Fed District saw new orders jump out of negative territory to a reading of 0.7%. While a majority of the indexes remain in negative territory, the pace at which manufacturing in the region is contracting is slowing. Businesses in the area are optimistic that the district may soon see greater improvement in its manufacturing space.

    Jul 27 2:14 PM | Link | Comment!
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