Let’s Go Live in Venezuela

Inflation: 720%                                                                                                                                                                                                                                                                         GDP growth rate: -14%…that’s a minus                                                                                                                                                                                                                             100 Bolivars worth 5 cents                                                                                                                                                                                                                                                     Hospitals: Try getting supplies                                                                                                                                                                                                                                             Supermarkets: Try getting food, diapers, fruit…anything                                                                                                                                                                                               Suspended from the Mercosur                                                                                                                                                                                                                                               Women crossing border to sell hair                                                                                                                                                                                                                                     Government takeover of everything

How’s that working Danny Glover? How’s that Sean Penn? A great country destroyed by Hugo Chavez and now super Hugo in Nicholas Maduro and he still runs the joint.

 

 

The Closing Look

Stocks rallied on Monday after Italy voted “no” on their referendum to reform the constitution. Italy’s Prime Minister, Matteo Renzi, resigned after his party lost and the “no” vote won. Overnight, futures were down slightly but they turned higher as the euro reversed from a big loss on the news. Once again, markets are adopting to the new reality on the ground. It took markets 3 days to recover from the Brexit vote, less than one day to recover from the U.S. election initial sell off, and only a few hours to recover from Sunday’s vote. Steel stocks and financials remain strong as investors look forward to Trump’s pro-growth policies.

Gary’s Thoughts: The NASDAQ (for a change) took over leadership for a day as semis bounce after a mini-meltdown Thursday. Also, some underperforming big cap tech/internet bounced but not sure they will have the juice going forward. Financials just ridiculous. No pullbacks of import so far.

The Morning Look

Market Update:

Stock futures are slightly higher ahead of Tuesday’s open after Italy’s referendum failed over the weekend and investors now look ahead to the ECB meeting on Thursday and then next week’s Fed meeting. It took stocks three days to recover from Brexit, less than one day to recover from the U.S. election, and a few hours to recover from Italy. Clearly, markets are getting smarter and adapting to the new reality that people want change and are not happy with the establishment.

Gary’s Thoughts: Only thing sticking out is oil prices backing up nicely…so oil stocks coming in but just a wee bit. We will be watching whole group as they pull in.

Economic Calendar:

  • International Trade 8:30 AM ET
  • Productivity and Costs 8:30 AM ET
  • Gallup US ECI 8:30 AM ET
  • Redbook 8:55 AM ET
  • Factory Orders 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 52-Week Bill Auction 11:30 AM ET

Highlights:

  • Trump, Gore Meet on Climate After Talks Opened With Ivanka
    Gary’s Thoughts: Why meet with this charlatan? He said over 10 years ago, cities would be under water. What happened to that>
  • Berkshire Could Get a $29 Billion Boost From Trump’s Tax Plan
    Gary’s Thoughts: Buffett=smart!

Amazon Supermarkets?

Amazon.com Inc just announced it has opened a brick-and-mortar grocery store in Seattle without lines or checkout counters.

The name of the store, Amazon Go, will be 1,800-square-feet and get this: use sensors that detect what shoppers buy and automatically bills it to their Amazon account.

Will this work? The fact is checkout lines are the biggest pains in the rear of the food shopping experience. Will that be enough to attract enough people to grow this business? We are not so sure but if there is any company that has changed the playing field of shopping, it is Amazon. We are not so sure the big supermarket chains are shaking in their boots just yet but no doubt they will be watching. They must know how much labor costs would come down under this scenario.

 

 

 

Monday Pre-Market Look: Stocks In The News Before The Open

McDonald’s (MCD) — Nomura upgraded the restaurant chain’s stock to “buy” from “neutral,” saying the issue of tough U.S. comparable sales will subside and that it is enthusiastic about the company’s planned menu updates.

Apple (AAPL) — London’s Sunday Times reports that Apple is in a customs dispute with Britain, which is said to have labeled the wristband of the Apple Watch as “other plastic,” making it subject to a 6.5 percent tariff. Separately, Bloomberg is reporting that Yoky Matsuoka has left the company – she joined Apple in May to serve as a health technology executive after serving as vice president of technology at Nest.

Energy Transfer Partners, Sunoco Logistics — The two companies issued a statement criticizing the government’s decision not to issue an easement for their Dakota Access Pipeline. The companies called it a “purely political action” and that the project has “done nothing but play by the rules.”

Royal Bank of Scotland — The bank settled most of its legal claims with shareholders involving a $15.2 billion rights issue in 2008. Those shareholders alleged they were misled when they took part in that issue.

Walt Disney (DIS) — Disney’s “Moana” topped the weekend box office for the second straight weekend, taking in $28.4 million in North American ticket sales, continuing a strong year for Disney movies ahead of the release of the next “Star Wars” Film in mid-December.

Johnson & Johnson (JNJ) — J&J increased its bid for Switzerland-based biotech firm Actelion to more than $250 per share, according to a Bloomberg report, after Actelion rejected an initial proposal of about $246 per share.

Alphabet, Apple, Citigroup, Delta Air Lines, Deutsche Telekom, Merck, Novartis, Toll Brothers, Unilever, Walt Disney — Barron’s has named these companies as its 10 favorite stocks for 2017, saying they have largely lagged the market this year and have reasonable valuations.

Air Products & Chemicals (APD) was upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.

Citrix (CTXS) was upgraded to ‘Buy’ from ‘Neutral’ at Mizuho Securities USA with a price target of $100.

Marvell Technology Group Ltd (MRVL) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.

Hilton (HLT) was upgraded to ‘Buy’ from ‘Sell’ at MKM Partners with a 12-month target price of $28.

McDonald’s (MCD) was upgraded to ‘Buy’ from ‘Neutral’ at Nomura with a12-month target price of $139.

Nike (NKE) was upgraded to ‘Buy’ from ‘Hold’ at HSBC with a price target of $60.

Quantenna Communications (QTNA) was upgraded to ‘Strong Buy’ from ‘Buy’ at Needham & Co with a 12-month target price of $25.

Globus Medical (GMED) rose nearly 3% in after-hours trading after it was named to replace Talen Energy in the S&P MidCap 400 effective after the close of trading Tuesday, December 6.

HomeStreet (HMST) climbed over 3% in after-hours trading after it was named to replace UMB Financial in the S&P SmallCap 400 effective after the close of trading Tuesday, December 6.

B&G Foods (BGS) gained over 1% in after-hours trading after it acquired Victoria Fine Foods for $70 million in cash.

Zendesk (ZEN) slid over 5% in after-hours trading after the company said two of its SVPs were leaving the company, Marcus Bragg effective December 7, and Amanda Kleha effective December 30.

Source: Barchart, CNBC, FoxBusiness, Reuters, Bloomberg

Weekend notes!

We actually wrote the following on November 20th. We reprint them again because not much has changed:

“We continue to believe this remains a very split tape…regardless that some major indices are in new high ground.

Bounces aside…and to be clear, all these areas are deeply oversold…we continue to avoid:

Gold/silver, real estate, utilities, beverages, food, household products, tobacco,emerging markets, apparel, medical supplies,medical equipment, pharma, solar, big telecom, big cap tech/internet (Facebook, Google, Alibaba, Amazon and throw in Tesla.) On top of that, many foreign countries continue to under-perform and lastly our technical call on the bond market remains in force as the bond bear remains in force.

But…notwithstanding pullbacks (which eventually will happen), extended financials, insurance, managed care,  investment brokers, steel, airlines, transports, rails, industrials and semiconductors remain the bull of the woods. Just keep in mind, they are quite overdue to pull in where one can take a look at them.

Lastly, watch them oils…not all but many are sitting in what we believe are great looking bases. A breakout of range will add another group to the positive column.”

Fast forward to now:

Oils have broken out. Financials still lead but now thinking they start consolidating. Big cap tech/internet are still under pressure. All the poor areas have remained poor while all the good areas have remained good…except for one area. The SEMICONDUCTORS took a huge hit Thursday with many names giving back several weeks of gains in one day. The good news is that the Sox held the 50 day and bounced. It will need to continue to hold there. If it gets taken out, that’s one heck of an important area going bye bye. You can also now see the NASDAQ and NDX underperforming, especially the NDX.

Lastly, there was another so-called “the world is going to end” vote in Italy that has supposedly gone the wrong way. In spite of all the babbling, futures have hardly budged.

The Closing Look

Stocks were mostly lower on Thursday as heavy selling showed up in the tech sector for the second straight day which dragged the market lower. The tech heavy Nasdaq 100 and many semiconductor stocks fell in heavy trade and broke down below key levels of support. In fact, the Nasdaq 100 has erased all of its post election gains. Financial stocks were strong for most of the day but the rest of the market was weak.Traders digested a slew of economic data. Weekly jobless claims came in at 268K, missing estimates for 253K. PMI manufacturing index came in at 54.1, beating estimates for 53.9. The ISM manufacturing index came in at 53.2, beating estimates for 52.3. Meanwhile, construction spending came in at 0.5%, missing estimates for 0.6%.

Gary’s Thoughts: Massive divergences  continue and just get wider. We are in hopes you listened to our technical analysis on the bearish areas as they just get worse. Bounces can happen at any time but the bear areas remain bear areas. On top of that, let’s keep an eye on what the semis did yesterday…giving back 3 weeks of “Trump gains” in one day. In the past couple years, we have seen the Sox get mauled only to hold and turn back up.

Other notes:

 

Oil stocks gave back most of the 2nd day of gains even though oil prices remained strong.

Financials…non stop piling on continues…some with bullish flag breaks to the upside.

The Morning Look

Market Update:

Stock futures are lower ahead of Friday’s open as investors wait for the always fun and fake jobs report to be released. The market is digesting a steep decline in the Nasdaq and semiconductor stocks over the past few days.

Gary’s Thoughts: We forgot to mention the continued mauling in the big cap tech/internet. We have been telling you for weeks to avoid. All trading terribly and with the semis action yesterday, one better take notice.

Fake jobs number is out…another 445,000 left work force enabling rate to go to 4.6%. Where’s the list of the 445,000 people?

Economic Calendar:

  • Employment Situation 8:30 AM ET
  • Lael Brainard Speaks 8:45 AM ET
  • Daniel Tarullo Speaks 12:30 PM ET
  • Baker-Hughes Rig Count 1:00 PM ET

Highlights:

  • Trump Scores Early Victory at Carrier
    Gary’s Thoughts: Political winner but more importantly, 1000 families do not lose their jobs.
  • Global Bonds Suffer Worst Monthly Meltdown as $1.7 Trillion Lost
    Gary’s Thoughts: Probably due for relief rally but no doubt, an important trend is established.

The Morning Look

Market Update:

Stock futures are flat ahead  of Thursday’s open on the first day of December. Oil prices vaulted 9% on Wednesday after OPEC cut production for the first time in 8 years. The always fun (and fake) jobs report will be released on Friday.

Gary’s Thoughts: Futures flat but jello moving all over the plate. Oil prices up another couple percent in pre-market. Oil stocks continue on yesterday’s breakout. In the past, these breakouts failed. Not sure they fail this time.

Economic Calendar:

  • Chain Store Sales
  • Challenger Job-Cut Report 7:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Gallup Good Jobs Rate 8:30 AM ET
  • Loretta Mester Speaks 8:30 AM ET
  • Robert Kaplan Speaks 9:00 AM ET
  • PMI Manufacturing Index 9:45 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • ISM Mfg Index 10:00 AM ET
  • Construction Spending 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • After OPEC- Analysts Believe Big Oil Earnings Will Double in 2017
    Gary’s Thoughts: A bet on higher prices. Genius!
  • GoPro Cuts Jobs and Refocuses, but Faces Growing Competition
    Gary’s Thoughts: Gopro…we were wriied from day one. Too much comp!

What’s So Bad About Saving 1,000 Jobs?

We are amazed at the White House reaction and we are amazed by the left’s reaction to Trump’s saving of 1,000 Carrier jobs in Indiana. What is the matter with these people. Did they not see the video of the employees when they were told they would lose their jobs? Did they not see the reaction? We understand the “everything is politics” reaction by both the left and the right but this is ridiculous.

The left says they were bought off using taxpayer dollars. Since when has the left given a crap about the taxpayer? They have sat silent while $9 trillion of new debt blew up under Obama. For us, there is no downside to what happened. Frankly, we believe there is only upside as Carrier’s action may set a precedent for other companies to follow. We are already hearing rumblings that Apple may start manufacturing phones here in the U.S.

We watched some of these employees interviewed today. All were thankful and all let out a deep sigh of relief. We would have loved to see one of these imbeciles on the left debating one of these employees. That would have been great tv.

We are not the greatest fans of  Trump. We have highlighted our issues here and on radio. But he is now President-elect and will give him every chance to be great and do great. We did the same thing for President Obama but unfortunately, only a week or two after gaining power, he fibbed and proposed the $800 billion stimulus…this just a few weeks after stating he wanted to cut debt in half.