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3/7/2024 10:10:13 AM Eastern Time

ON AUTOPILOT  
By Charles Payne, CEO & Principal Analyst

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Does this look like a snapshot (below) of a stock market that’s losing steam?

Yesterday, large-cap stocks fared well, but midcaps fared better as the stealth rally continued.

It’s not the same as The Beatles breakup, but the ‘Mag Seven’ continues to splinter as Nvidia (NVDA) and Meta (META) keep chugging along while the rest struggle.

There were lots of nuggets in the Fed’s Beige Book, especially from community perspectives:

New York

Cleveland

Atlanta

Mentions of the recession continue to ease, although they are still higher than one would imagine, considering the aggressive action taken by Powell & Co.

Just as we learned Commercial Real Estate (CRE) jumped and Jay Powell was saying small banks were “fine,” the shares of New York Community Bank (NYCB) went haywire.

The shares of NYCB were down close to 50%, but then word of a $1.1 billion package, led by former Treasury Secretary Steve Mnuchin, turned the stock around.

Even when NYCB looked like it would bite the bullet, the market held up well, even Financials (XLF).

Portfolio Approach

We closed a position in Technology (APP) and are adding a new position this morning in Consumer Discretionary (DDS) in the Hotline Model Portfolio.

Today’s Session

Economic data came mostly as expected this morning, but continuing jobless claims are approaching a key milestone of 2,000,000.

Individual investor confidence over 50% typically scares Wall Street, but the experts ae too busy catching up to notice. 

Long Idea: Dillard's, Inc. (DDS) @ $406.68
Industry: Consumer Discretionary; Specialty Retail
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BACKGROUND: Dillard's, Inc. operates retail department stores in the southeastern, southwestern, and midwestern areas of the United States. Its stores offer merchandise, including fashion apparel for women, men, and children; and accessories, cosmetics, home furnishings, and other consumer goods. The company also engages in the general contracting construction activities. Dillard's, Inc. was founded in 1938 and is based in Little Rock, Arkansas.

SKINNY: DDS continues to run laps around its department store peers. The retailer reported a respectable holiday quarter with margins holding up relatively well due to inventory adjustments. Our target is $476.