Monday’s Closing Look

Stocks were relatively quiet on Monday as the world waited for President Trump to address Congress. Over the weekend, Warren Buffett said he was still bullish on U.S. stocks and said America’s best days are ahead of us. Elsewhere, David Tepper, billionaire hedge fund manager, said he’s still long stocks and short bonds. In economic news, durable goods orders rose +1.8% in January, slightly above the expected 1.7% estimate. Separately, Pending home sales, fell -2.8% in January and hit their lowest level in a year.

Gary’s Thoughts: Biotech ETFs breaking out of range….Financials acting tight again after one scare day…recent weakness in Trump stocks firm up as he states he will talk infrastructure tomorrow night…and lastly, small caps looked weaker past couple of weeks, and poof…strong day today keeping them in range.

Repercussions on what is supposedly harmless taxes.

These people (THE TAXERS) just don’t get it…and never will!

SOURCE: http://www.foxnews.com/politics/2017/02/27/distributors-say-layoffs-coming-because-philly-soda-tax.html

WEEKEND NOTES

Travel weekend so short and to the point.

The bond market looks like it is in the midst of putting in a good low for now. A bottoming process has been going on for weeks.

Of course, the UTILITIES and REITS have been leading the bond move. Both have turned the corner with a few breaking out. We are now watching to see if HOUSING moves out.

Big money flows have been going into consumer staples as FOOD, DRUGS,BEVERAGES,TOBACCO, HOUSEHOLD products have been catching up…some coming straight up off the bottom.

MEDICAL names are also showing up on our screens.

 

Major indices again showed buying as soon as anyone tries to sell the market down. Friday was another case in point. SEMIS down nicely…almost finished up. NASDAQ down decently…finished up.

Everything remains stretched and extended to the upside while bullishness has picked up but so far, nothing doing on the downside. If anything changes…

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.