Tuesday’s Closing Look

Once again, stocks rallied on Tuesday as Janet Yellen spent the day testifiying on Capitol Hill. For the first time in years, Yellen was slightly hawkish which should be expected now that all the “data” is bullish. Stocks are at record highs, the economy is growing, inflation is edging higher and the official unemployment rate is under 5%. Shares of Apple (AAPL) hit fresh record highs which helped the major indices race higher. Biotech stocks also got a nice bid as money begins to flow into that industry group.

Gary’s Thoughts: Financials breaking out again. Financials have been leading market since the elction. Need we say more? Also, watch some oils. A few setting up well. Not the whole group but a potential start.

Wednesday’s Morning Look

Market Update:

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

Gary’s Thoughts: Futures down a wee bit as we write this.  Not much else to report…interest rates backing up a little more here. Recent attempted break to the upside in bonds has been stopped dead in its tracks.

Economic Calendar:

  • MBA Mortgage Applications 7:00 AM ET
  • Consumer Price Index 8:30 AM ET
  • Retail Sales 8:30 AM ET
  • Empire State Mfg Survey 8:30 AM ET
  • Industrial Production 9:15 AM ET
  • Atlanta Fed Business Inflation Expectations 10:00 AM ET
  • Business Inventories 10:00 AM ET
  • Housing Market Index 10:00 AM ET
  • Janet Yellen Speaks 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • Eric Rosengren Speaks 12:00 PM ET
  • Harker Speaks 12:45 PM ET
  • Treasury International Capital 4:00 PM ET
  • William Dudley Speaks 7:15 PM ET

Highlights:

  • Yellen Sees More Rate Hikes Ahead If Economy Stays on Course
    Gary’s Thoughts:
  • Steel Resurgence Seen Fizzling as China’s Property Market Slows
    Gary’s Thoughts:

WEEKEND NOTES

We do not have to be long-winded this weekend.

Major indices moved out of a 9 week range. There has hardly been a down day of import since the election.

Financials held the 50 day. Still need to move out again. That has not happened yet.

Metals/mining look ready for another leg up as steel, copper and all that stuff set up.

The semis tease downside but reverse up every time there looks like trouble.

Not so great earnings are not sold. In fact, saw a few gaps to the downside that were bought intraday.

Chinese ADRs now coming on.

World markets remain strong.

In spite of protests, riots, missteps by the White House and a complete demonization by the media of the new President, markets continue to ignore.

The only real negative is sentiment but sentiment is a secondary indicator. Some of our readings are at multi-year bullish areas…as a contrary indicator, has to be kept in the file manager.

As always, if anything changes, we will let you know.

 

Friday’s Pre-Market Look: Stocks In The News Before The Open

Activision Blizzard (ATVI) jumped 10% in after-hours trading after it reported Q4 adjusted EPS of 92 cents, well above consensus of 73 cents, and its board authorized a $1 billion stock buyback over the next two years.

CyberArk Software Ltd (CYBR) dropped over 3% in after-hours trading after it said it sees full-year EPS of $1.20-$1.24, weaker than consensus of $1.34.

Ellie Mae (ELLI) climbed 5% in after-hours trading after it reported Q4 adjusted EPS of 57 cents, better than consensus of 49 cents.

VeriSign (VRSN) gained 1% in after-hours trading after it reported Q4 adjusted EPS of 92 cents, higher than consensus of 88 cents.

Seattle Genetics (SGEN) slid over 4% in after-hours trading after it said it sees 2017 revenue of $405 million-$445 million, below consensus of $490.5 million.

Columbia Sportswear (COLM) rose 4% in after-hours trading after it reported Q4 EPS of $1.20, above consensus of $1.10.

Monolithic Power Systems (MPWR) slid nearly 7% in after-hours trading after it said Q4 revenue for consumer end market fell to $38 million from $38.6 million y/y, the first year-on-year decline in consumer revenue in over a year.

Trivago (TRVG) jumped over 7% in after-hours trading after Expedia said Trivago’s Q4 revenue surged +65% y/y to $183 million.

Yelp (YELP) tumbled 9% in after-hours trading after it said it sees Q1 revenue of $195 million-$199 million, less than consensus of $204.4 million.

Cliffs Natural Resources (CLF) fell 4% in after-hours trading after it announced an offering of 50-million common shares.

Hortonworks (HDP) jumped 8% in after-hours trading after it said it sees 2017 GAAP revenue of $235 million-$240 million, above consensus of $234.8 million.

Regal Entertainment Group (RGC) gained over 2% in after-hours trading after it reported Q4 adjusted EPS of 33 cents, higher than consensus of 26 cents.

MagnaChip Semiconductor (MX) lost 3% in after-hours trading after it said it sees Q1 revenue of $157 million-$163 million, less than consensus of $166.5 million.

Control4 Corp. (CTRL) rallied nearly 7% in after-hours trading after it reported Q4 adjusted EPS of 31 cents, better than consensus of 24 cents, and then said it sees 2017 adjusted EPS of 90 cents-98 cents, higher than consensus of 85 cents.

Radisys (RSYS) sank nearly 15% in after-hours trading after it said it sees 2017 adjusted EPS of 7 cents-17 cents, below consensus of 25 cents.

Source: FoxBusiness, Barchart, Bloomberg, Reuters

Thursday’s Closing Look

Stocks rallied on Thursday after Trump promised a “big league” tax announcement. The market has been looking forward to hearing Trump’s tax plan because that is expected to be a big boost to the economy. Economic data was quiet. Weekly jobless claims slid by 12,000 to 234,000, which was lower than the Street’s estimate for 250,000. Separately, wholesale trade data for December showed a 1% increase on inventories.

Gary’s Thoughts: AND the financials lead off the news. Good action as Dow, S&P into new highs. As long as financials work, market works.

Wednesday’s Closing Look

Stocks closed mixed on Wednesday as  metals rallied.  Investors are looking forward to Trump’s pro-growth policies such as cutting taxes, deregulation and government spending…but nothing happening just yet.

Gary’s Thoughts: Short and succinct:  The S&P 500 hasn’t had a 1% intraday move since Dec 14…the longest period of intraday nothingness in history. Major indices in the 9th week of no movement of 2% up or down.

Thursday’s Morning Look

Market Update:

Stock futures are up just a wee bit before Thursday’s open as investors continue to digest a slew of earnings.

Gary’s Thoughts: Earnings have been just ok…nothing special but market still depending on tax cuts and regulation cuts. So far…nothing doing. Indices in the 9th week of the tightest range we have seen in a long time.

Economic Calendar:

  • Jobless Claims 8:30 AM ET
  • Bullard Speaks 9:10 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Wholesale Trade 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Charles Evans Speaks 1:10 PM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Companies moving to Mexico despite Trump warnings.
  • Gary’s Thoughts:  Never liked Trump strong-arming.
  • Dr. Alveda King: Sen. Warren Used the King Name to Stir Up Emotions
    Gary’s Thoughts: Let me get this straight. She is a hero for calling someone a racist? The usual template of some on the left. Disgusting!

Monday’s Closing Look:

Stocks ended slightly lower on Monday as investors digested the latest round of earnings. Energy stocks weighed on the market as crude oil fell. So far, over half of the S&P 500 companies have reported fourth-quarter results, and about two-thirds of them beat Wall Street expectations, according to Thomson Reuters. Furthermore, the long earnings recession is most likely over.

Gary’s Thoughts: Indices finish flat. BUT:

Oils continue to whither and would continue to mostly avoid.

Small caps rough day but remange range-bound. The same for most other indices.

Chinese ADRs getting a bid here.

Gold/silver continue to drift higher but massive resistance overhead.

Again…very range-bound…into the 9th week. Eventually we bust out or break down. We suspect the inner workings of the market will let us know. Follwow them financials.

 

WORRIED OVER TAX POLICY

“WORRIED OVER TAX POLICY!”

By Gary Kaltbaum- February 7,2017

Immigration…regulations…supreme court…trade policy…Iran…Russia…moratorium on travel…the wall…infrastructure…sanctuary cities…protests…the opposing party…your own party…so much to deal with but:

When will the new president enact his promised tax policies? When will he have the time? It seems to us tax policy may have just hit the back burner and that worries us. What exactly is his economic priorities? On thursday, tax policy is front and center. Friday, not so much. Today…front and center again but later in the year. A 200 day plan? That’s a lot of days.

It worries us because we think the market has anticipated tax reform and lower taxes. It worries us because we believe business owners, both small and large have anticipated it and have planned off of it. We worry that the more time passes, the tougher it is to get through. After all, we are dealing with massive government spending, massive debt and deficits and massive regulations that have worked as massive headwinds to the potential of the economy…and it is not getting any better.

It worries us because rumored advisors to the president were people like Stephen Moore and Larry Kudlow, two supply-siders that believe in smaller government and lower taxes. They are now nowhere to be found.

In case you did not know, the federal government is going to suck over $4 trillion out of the economy this year, up almost 10% from last year. In case you did not know, this is more than double the federal spending of the last year of Bill Clinton…which was $1.8 trillion. Where the hell is all that taxpayer largesse going? It is a simple formula: as the government grows, the potential for the economy slows.

The only way to change the trajectory of debt, deficits and the economy is to enact massive tax and spending policies that goes in the opposite direction. The workers are the driving force behind the economy…not government. Cut taxes across the board so the beast is not fed and then cut government across the board as there is a ridiculous amount of duplication, a ridiculous amount of bloat, a ridiculous amount of overpayment all because of the clear lack of accountability on anyone’s part because it is not their money they are spending. It is ours.

Tuesday’s Morning Look

Market Update:

Stock futures are up before Tuesday’s open as investors continue to digest a slew of earnings.

Gary’s Thoughts: Seeing some juice in some glamour tech/internet here. Notwithstanding poor reaction to AMZN and GOOG, seeing decent set-ups.

 

Economic Calendar:

  • International Trade 8:30 AM ET
  • Gallup US ECI 8:30 AM ET
  • Redbook 8:55 AM ET
  • JOLTS 10:00 AM ET
  • 4-Week Bill Auction 11:30 AM ET
  • 3-Yr Note Auction 1:00 PM ET
  • Consumer Credit 3:00 PM ET

Highlights:

  • Trump Talks Immigration, NATO at MacDill Air Force Base
    Gary’s Thoughts: Been to MacDill…fabulous fabulous place.
  • U.S. court to hear arguments Tuesday on Trump’s travel ban
    Gary’s Thoughts: This one is headed to Supreme Court.