Thursday’s Closing Look

Stocks were relatively quiet on Thursday after the new Treasury Secretary, Steve Mnuchin,  said a “very significant” tax reform will be passed by August. Mnuchin said, “We’ve been working closely with the leadership in the House and the Senate and we’re looking at a combined plan.” Stocks have soared since the election, thanks, in part, to Trump’s pro-business policies, deregulation, and a big tax cut in the near future.

Gary’s Thoughts: We can now complain a little. First off, the market has had a good run. Secondly, our sentiment figures show very high optimism. Third, we finally saw what we would call a “break in the action” today as the underbelly of the market was much worse than the Dow. In fact, there is a decent chance that the commodity complex put in a near-term decent high as well as a few other areas. This in itself does not mean the end of the world…but markets are stretched, extended ad overbought to the upside where pullbacks are due. Today’s action could be a starting point. We will post radio show to you in the morning.

Wednesday’s Closing Look

Stocks were relatively quiet on Wednesday as investors digested the recent and very strong rally. The Fed Minutes hinted that more rate hikes may be on the horizon, especially if Trump’s policies do indeed spur economic growth. In economic news, weekly mortgage applications slid by 2% amid tepid refinancing levels. A separate report showed that existing home sales grew by 3.3% in January.

Gary’s Thoughts: Of note: continue to avoid energy as they break down even more…a few commodity names breaking down…retail remains gross but after that, not much to complain about. Will say that underlying market worse than Dow today…but market needs a pullback/rest anyhow. Maybe one on its way. Oh…the fed did something today but they do not matter much now…thankfully.

Thursday’s Morning Look

Market Update:

Stock futures are higher ahead of Thursday’s open as the market continues to flirt with record highs.

Gary’s Thoughts: Just a tad higher. OIL PRICES rally…so oversold energy will bounce but still avoid. TSLA  now down this morning on another loss. If we had to guess, we think TSLA will need to raise money as they burned through $1 billion. To make cars, you need capital. Otherwise, all quiet this morning.

Economic Calendar:

  • Weekly Bill Settlement
  • Jobless Claims 8:30 AM ET
  • Chicago Fed National Activity Index 8:30 AM ET
  • Dennis Lockhart Speaks 8:35 AM ET
  • FHFA House Price Index 9:00 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Kansas City Fed Manufacturing Index 11:00 AM ET
  • EIA Petroleum Status Report 11:00 AM ET
  • Robert Kaplan Speaks 1:00 PM ET
  • 7-Yr Note Auction 1:00 PM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Trump: Tax reform plan is ‘very well finalized’ but will come after ACA repeal
    Gary’s Thoughts: Lots of talk…let’s see the fine print…and the action.
  • OPEC Still Waiting for Evidence Oil Cuts Are Doing Their Job
    Gary’s Thoughts: So far…oil prices have been flattish for quite a while.

Tuesday’s Closing Look

Stocks were closed on Monday for the Holiday. On Tuesday, stocks rallied nicely as investors continued to buy stocks. The White House announced Monday that Lieutenant General H. R. McMaster will become the new national security advisor. McMaster replaces Michael Flynn, who resigned last week. Economic news was light. The flash read on the IHS Markit U.S. purchasing managers’ index came in at 54.3 in February, falling slightly from January’s 14-month peak. The “latest survey data indicated that business optimism moderated among U.S. private sector firms in February, driven by weaker confidence across the service economy,” IHS said.

Gary’s Thoughts: And another up  day…but be forewarned…need some sitting or pulling in soon…it is a necessity.

Wednesday’s Morning Look

Market Update:

Stock futures are lower ahead of Wednesday’s open as the market continues to flirt with record highs.

Gary’s Thoughts: Look at that…we are down at the open. We don’t have to tell you markets are just way overdue for sitting or pulling in…which would be normal and not a bad thing.

Economic Calendar:

  • MBA Mortgage Applications 7:00 AM ET
  • Redbook 8:55 AM ET
  • Existing Home Sales 10:00 AM ET
  • 2-Yr FRN Note Auction 11:30 AM ET
  • Jerome Powell Speaks 1:00 PM ET
  • 5-Yr Note Auction 1:00 PM ET
  • FOMC Minutes 2:00 PM ET

Highlights:

  • Russia’s U.N. envoy dies suddenly in New York
    Gary’s Thoughts: This one DOESNT look suspicious…we think!
  • Mark Cuban: Robots will ‘cause unemployment and we need to prepare for it’
    Gary’s Thoughts: Technology has been doing that job for a couple decades.

WEEKEND NOTES

“STILL…HARDLY ANY COMPLAINTS!”
By Gary Kaltbaum- February 20, 2017
There continues to be very little to complain about. Major indices continue their upward trajectory with nary a pullback. In fact, since the election, we have not seen a correction of even 2%. This in itself is amazing. Normally, there is an ebb and flow in where markets give back a few before moving higher. Not right now. For sure, we are due but until then:
Biotech/healthcare now coming on.
Consumer staples now coming on off of proposed buyouts.
Financials another leg up.
New highs expand
Stocks gapping down on earnings immediately bought up.
Companies with blah numbers romping. For example:
CSCO  flat earnings…sales down…gaps up and breaks out
CAT 13% sales drop…ready to break out.
IBM no growth and used a ridiculously low tax rate…breaks out and ramps
Semis continue on their merry way.
As long as financials and semis work, not much to worry about.
The only thing to complain about remains sentiment which is now frothy and overly bullish (which is bearish) but this can last for a while as sentiment is not a pinpoint indicator. As always, if anything changes, we will let you know.

Thursday’s Closing Look

Stocks slid on Thursday after 5 strong days of hitting fresh record highs. Energy shares lagged as crude oil pulled back. President Trump tweeted about the stock market and said, “Stock market hits new high with longest winning streak in decades. Great level of confidence and optimism – even before tax plan rollout!” Economic data was strong with weekly jobless claims holding near their lowest levels in more than 40 years, while the Philadelphia Federal Reserve manufacturing index hit its highest level since January 1984.

Gary’s Thoughts: It is early in the Trump presidency. Markets making a big bet but have to say, economic numbers accelerating. Market due to relax.

Friday’s Morning Look

Market Update:

Stock futures are lower ahead of Friday’s open as the market finally takes a breather and pulls back from record highs.

Gary’s Thoughts: Futures down…no issue here f the market sits, pulls back and relaxes. It is due.

Economic Calendar:

  • E-Commerce Retail Sales 10:00 AM ET
  • Leading Indicators 10:00 AM ET
  • Baker-Hughes Rig Count 1:00 PM ET
  • Loretta Mester Speaks on Sunday 8:15 PM ET

Highlights:

  • Trump taps Acosta to be labor secretary
    Gary’s Thoughts: Next!
  • Snapchat Parent Sets Valuation of Up to $22.2 Billion
    Gary’s Thoughts: Money losing company…high valuations. But known name.

Wednesday’s Closing Look

Stocks rallied on Wednesday as Janet Yellen spent the day testifying on Capitol Hill. Economic news was mixed. The consumer price index (CPI) rose 0.6% in January, which was higher than the Street’s estimate for for 0.3%. Separately, Retail sales, rose 0.4% last month beating estimates for 0.1%. The Housing market index came in at 65, missing estimates for 68. Weekly mortgage applications fell -3.7%, which was sharply lower than last week’s reading of 2.3%. Meanwhile, the Empire State Manufacturing Index came in at 18.7, higher than the Street’s estimate for 7.5.

Gary’s thoughts: Ho hum…another up day off of the breakout of 9 tight weeks in the market. No complaints…and as we have said, biotechs re-emerging. Would love to see some rest in here.

Thursday’s Morning Look

Market Update:

Stock futures are lower ahead of Thursday’s open as stocks continue to hit fresh record highs.

Gary’s Thoughts: Futures flat…would love some rest here…NTES big gap to new highs of the day….

One important note: lots of yapping that Jack Dorsey bought $7 million of Twitter stock this week. Terrific but he also bought in previous years at much higher prices. We are not saying that the stock does not go higher but when looking at insider buying, it is important to look at the past.

Economic Calendar:

  • Housing Starts 8:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Philadelphia Fed Business Outlook Survey 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Yellen Sees More Rate Hikes Ahead If Economy Stays on Course
    Gary’s Thoughts: New president…we guarantee 100% a hike in March bit who cares at this point/
  • IRS won’t reject tax returns if they do not include Obamacare disclosures
    Gary’s Thoughts: Trump ordered this and good…terrible Obamacare mandate/rule…whatever.