22 Dec
Daily Market Commentary

Week-In-Review: Santa Arrived Early; Tax Cut Sparks Big Rally On Wall Street

Santa Comes Early; Tax Cut Sparks Big Rally On Wall Street

The major indices continued to trade near record highs as 2017 winds down. So far, 2017 is on track to be the strongest year since 2013. The U.S. economy is the largest its ever been in history and continues to grow. Last week, the government said, GDP grew by +3.2% which was the strongest reading in over a year. Moreover, the tax reform bill was passed which should spark even more economic growth in the years ahead. That, in turn, should help corporate earnings continue to grow, which should lead to even higher stock prices. Remember, even with all this, the Fed still has rates at only 1.5% which is exceptionally low on a historical basis. If the economy and/or the market starts to overheat, one big concern could be tighter monetary policy from global central banks. But that is a long way off. Remember, the psychological wounds of 2008 are still felt by many people so most likely Central Bankers will continue to err on the side of easy money policies. Bottom line, this aging bull market just got a big boost and deserves the bullish benefit of the doubt until we see any significant selling show up.  

Mon-Wed Action:

Stocks rallied nicely on Monday after as investors eagerly awaited a vote on the tax reform bill. The latest bill would cut corporate taxes to 21%, which is much lower than the current rate of 35%. In other news, several corporate deals helped lift sentiment. Campbell Soup announced it will buy Snyder’s-Lance for nearly $4.9 billion. Separately, Chocolate giant Hershey said it will acquire Amplify Snack Brands, the maker of Skinny Pop popcorn, for $12 per share. Finally, Oracle said it will buy Aconex — a software company based in Australia — for $1.2 billion.
Stocks were quiet to mostly lower on Tuesday as Congress moved one step closer to approving the tax reform bill. Separately, Apple fell over -1% after Nomura downgraded the tech giant’s stock. CNBC reported that tech has been the best-performing sector this year, rising nearly 40% in 2017. Stocks closed mixed to mostly lower on Wednesday after Congress passed the tax reform bill. On the economic front, weekly mortgage applications fell -4.9%, while existing home sales hit an 11-year high. After the close, AT&T & Comcast gave $1,000 bonuses to hundreds of thousands of workers which is a big boost of confidence for the economy. Separately, Wells Fargo and Fifth Third Bancorp both raised the minimum wage after the tax bill was passed. Clearly, this will be a big boost to the economy (on multiple levels) and that will translate into stronger earnings and stronger global growth.

Thur & Fri Action:

Stocks rallied nicely on Thursday after more companies pledged to spend and reinvest its savings from the tax bill on higher wages. Even though job growth has been strong over the past few years, the one big missing ingredient has been higher wages. That’s why stocks rallied when, so many companies immediately said they will increase wages immediately after the tax cut was passed. Stocks were relatively quiet on Friday as investors digested a big week and looked forward to the long holiday weekend. The market will be closed on Monday for Christmas.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Want To Talk To Adam About Your Portfolio? Schedule A Complimentary Portfolio Review Here…

15 Dec
Daily Market Commentary

Week-In-Review: Central Banks Help Stocks Hit New Highs

Central Banks Help Stocks Hit New Highs

Stocks rallied nicely last week after nearly every major central bank in the world made it clear that they will move very slowly to “normalize” rates. Additionally, politicians in D.C. made a big step to help pass the tax reform bill. Earlier this month, I wrote, the major indices are “down” for the month, but they will most probably end “higher” because we are in a very strong bull market and December tends to be a bullish month for Wall Street. So far, that is exactly what is happening. 

Mon-Wed Action:

Stocks were quiet on Monday after a pipe bomb was detonated in Times Square. Thankfully, the NYPD acted fast, have the person in custody and the situation was resolved quickly. In other news, bitcoin futures started trading last Sunday night without a problem.
Stocks ended mixed on Tuesday as the Dow jumped over 100 points but the tech-heavy Nasdaq Composite ended in the red. News broke that a possible tax deal would be reached if the corporate tax rate came down to 21%. Remember, the tax cut, in its current form, takes away a few deductions that tech companies use heavily (mainly intellectual property and capital spending). But the cut from 35% to 20 or 21% is more than enough to make up for those deductions. The Fed began its two-day meeting on Tuesday. Jerome Powell is set to take over in February when Janet Yellen’s term ends. The Fed is currently forecasting it will raise rates three times in 2018. After the close, Democrat Doug Jones won the election for the Alabama Senate.
Stocks were quiet on Wednesday after the Fed raised rates (which was largely expected) by another quarter point to 1.50%, up from 1.25%. Separately, weekly mortgage applications fell -2.3% which is largely expected as rates raise. China’s Central Bank also raised their rate for money markets.

Thur & Fri Action:

Before Thursday’s open, the European Central Bank held its last meeting of 2017. The ECB said it wants to normalize monetary policy but will do it slowly. In M&A news, Disney acquired Fox. Stocks rallied on Friday as buyers showed up and continued to buy the latest “dip.”

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

08 Dec
Daily Market Commentary

Week-In-Review: Stocks End Busy Week Higher

Stocks End Busy Week Higher

Stocks ended the week higher and the Dow and S&P 500 turned positive for the month. The Nasdaq and Nasdaq 100 are still slightly lower for the month but are on track to turn higher. Remember, what I said last week, it would be perfectly normal to see the market open lower for the month and end higher. In fact, that is a very bullish sign and exactly how healthy markets behave. As 2017 winds down, the market remains exceptionally strong and weakness continues to get bought. Until we see any significant selling show up and last more than a few days, the market deserves the bullish benefit of the doubt.

Mon-Wed Action:

Stocks ended mixed to mostly lower on Monday on the first full trading day after the Senate managed to narrowly pass a bill to reform the tax system on Saturday. Around 2am EST, Senate Republicans managed to win the final vote by a 51-49 margin, after Republicans had to rework the bill late on Thursday and Friday. When futures opened for trading late Sunday night, Dow futures were up over 200 points which lasted into Monday’s open. Shortly after the open, the Dow surged nearly 300 points but sellers showed up and the Dow only closed up 58 points. Meanwhile, the rest of the market closed lower as tech stocks weighed on the market. On Tuesday, stocks ended mostly lower causing the S&P 500 to have its first 3-day losing streak since August. On Wednesday, stocks were quiet as the Nasdaq bounced and the Dow & S&P 500 were little changed.

Thur & Fri Action:

Stocks edged higher on Thursday after the House passed a bill to help avoid a government shutdown. Elsewhere, it was encouraging to see Lululemon ($LULU) gap up after the retailer reported earnings. For the past 18-24 months, retail stocks have been under pressure and now are slowly turning the corner. Wal-Mart ($WMT) gapped up a few weeks ago and hit a new record high after reporting earnings. Stocks rallied nicely on Friday after the government released a strong jobs report. Last month, U.S. employers added 228k new jobs, beating estimates for a gain of 190k.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

06 Dec
Media Quotes

CNBC Asks Adam About The Market

Tech stocks rise as rest of market trades little changed

  • Tech stocks were on track Wednesday to post consecutive gains after being pressured over the past week.
  • Investors also kept an eye on Washington as they awaited new details on Congress negotiations to overhaul the U.S. tax code.

Tuesday, December, 6 2017

Tech stocks rose on the back of gains in Facebook. The rest of the market took a pause as investors awaited more details on what the final tax overhaul from Congress will look like
The Nasdaq composite rose 0.3 percent as Facebook share gained nearly 2 percent. Evercore ISI initiated Facebook with an outperform rating. Analyst Anthony DiClemente said Facebook will lead the “FANG” stocks higher in 2018.
The S&P 500 traded just 0.1 percent higher, as information technology rose 0.9 percent.Tech stocks were on track Wednesday to post consecutive gains after being pressured over the past week.
The Dow Jones industrial average gained just 7 points, with Microsoft rising 1.5 percent to lead advancers.
Investors also kept an eye on Washington as they awaited new details on Congress negotiations to overhaul the U.S. tax code. The GOP-led Congress passed a bill on Saturday that increased the chances of the overhaul —which would significantly lower corporate taxed — taking place this year.
But the Senate’s bill is different than another one passed by the House. Now both chambers have to work on and pass a new bill before sending it to the White House.
Traders work on the floor of the New York Stock Exchange.

Getty Images
Traders work on the floor of the New York Stock Exchange.
Expectations of tax reform have been a boon for U.S. stocks all year, helping then surge to record highs. But the rip-roaring rally has slowed down recently. The S&P 500 and Nasdaq completed a first three-day losing streak on Tuesday, their first since August.
“You definitely have a market that’s taking a pause,” said Art Hogan, chief market strategist at B. Riley FBR. “I think it’s really about how quickly we’ve rotated into the pro-tax reform sectors.”
Financials, one of the sectors that would theoretically benefit greatly from lower corporate taxes, have been on a tear recently. The sector is up nearly 2 percent over the past week. Tech, meanwhile, is down more than 1 percent in the same time period.
Komal Sri-Kumar, president of Sri-Kumar Global Strategies, said the market is taking a pause as it’s “not clear that the tax changes that the Senate approved during the early hours of Saturday are going to be as stimulative as the markets first thought.”
U.S. equities kicked off the session trading lower as overseas stocks declined. Asian stocks fell broadly, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng index both pulling 2 percent. The Shanghai composite also fell 0.3 percent.
In Europe, equities also declined. The German Dax dropped 0.4 percent while the Stoxx 600 index slipped 0.1 percent.
“We’re seeing some end-of-year jitters and we’re now taking some profits,” said Adam Sarhan, CEO of 50 Park Investments.
In corporate news, drone maker AeroVironment shares hit an all-time high after the company posted strong quarterly sales.
Meanwhile, OSI Systems plunged 30 percent after famed short seller Carson Block called the company “rotten to the core.”

 
Link:
https://www.cnbc.com/2017/12/06/us-stocks-global-markets-tax-reform.html

01 Dec
Daily Market Commentary

Week-In-Review: Another Record Setting Month On Wall Street

Another Record Setting Month On Wall Street

The market remains exceptionally strong as the bulls remain in clear control and stocks refuse to fall in a meaningful fashion. Every time the market hints at pulling back, almost immediately, the bulls show up (buy the dip crowd) and send stocks soaring. The two largest “down” days (that were significant) this year happened on June 9th and then last Wednesday, November 27, both in the Nasdaq. Both those days happened after a big rally and then the Nasdaq, and other big cap growth stocks, sold off in heavy volume. Normally, that mark a near term high but not this market. Stocks soared on Thursday and the Dow topped 24,000 for the first time ever which was a few days after the S&P 500 topped 2,600. At this point, the market is very extended to the upside and way overdue to pullback. Until it does, weakness should be bought, not sold.

Mon-Wed Action:

Stocks ended mixed on Cyber Monday as investors waited to see the results of the first real holiday shopping weekend of the season. So far, the data showed online Black Friday sales rose close to +17% from the same period last year. Meanwhile, Cyber Monday sales also rose double digits vs 2016 numbers.

Stocks rallied sharply on Tuesday, with the Dow jumping 255 points, after the U.S. Senate moved closer to passing tax reform. Goldman Sachs expects a 50% chance tax reform is accomplished this year and an 80% chance it gets done in 2018. Stocks ended mixed on Wednesday but the Nasdaq, and a slew of growth stocks, fell hard and dragged the market lower. Before the open, the government released the second estimate of US Q3 GDP which came in at +3.3%, beating estimates for a gain of +3.2%. In other news, Bitcoin surged above 11,000 24 hours after it broke above 10,000. If that’s not a climax run, I don’t know what is.

Thur & Fri Action:

Stocks soared on Thursday, with the Dow rallying over 300 points after it looked like the Senate would pass the tax cut. After the close, the Senate pushed the vote back because they were still lobbying some members. Stocks fell on Friday after a few negative headlines emerged regarding the ongoing Russia investigation.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

24 Nov
Daily Market Commentary

Week-In-Review: Stocks Soar As Q4 Holiday Shopping Season Begins

Stocks Rally On Shortened Holiday Week

The market remains very strong as the Q4 holiday shopping season officially began. The S&P 500 topped 2,600 for the first time as buyers showed up with a very shallow two week pullback. The Nasdaq also hit a fresh record high as stocks continue to surge. The Dow closed below its record high and also remains very strong. The fact that the latest pullback literally only lasted two weeks illustrates how strong the bulls are right now. It is still early, but so far, all the data I’m seeing suggests the Q4 holidays season will be strong which bodes well for both Main Street and by extension Wall Street. The fact that the bulls showed up (again) last week illustrates how strong the market is right now. Remember, in bull markets, weakness should be bought, not sold.

Mon-Wed Action:

Stocks rallied on Monday on the first day of a short holiday week. Stocks rallied nicely on Tuesday after the latest round of mostly positive earnings were announced. The S&P 500 crossed above 2,600 for the first time ever and the Nasdaq hit a fresh record high. Economic data was mostly positive as the Chicago Fed National Activity Index rose in October and Existing home sales beat estimates in October. Stocks ended mixed on Wednesday as volume remained very light before the holiday. In the afternoon, the Federal Reserve said they were concerned about the economy’s strong rally heading into next year. That is a double edged sword, because on one hand, that is bullish for stocks but on the other hand, if the economy over-heats, the Fed will tighten rates faster which is not good for stocks.

Thur & Fri Action:

Stocks were closed on Thursday in observance of Thanksgiving. Stocks rallied on Black Friday as early signs point to a very strong holiday shopping season. Black Friday sales began on Thursday and lasted all night. Additionally, this Q4 holiday shopping season is expected to be strong because the unemployment rate remains low and the economy is strong.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

21 Nov
Media Quotes

CNBC Asks Adam About Earnings Season & Record High Stock Prices

S&P 500 passes 2,600 for the first time, led by tech stocks
Tuesday, Nov 21, 2017

  • The Dow, S&P 500 and Nasdaq hit record highs as tech stocks rallied.
  • The Technology Select Sector exchange-traded fund (XLK, which tracks the S&P 500 tech sector, rose 1 percent to trade at levels not seen since 2000.
  • Investors also cheered strong quarterly results from top companies in Corporate America.

U.S. stocks rose to record highs on Tuesday as a rally in tech lifted the broader market. Investors also cheered strong quarterly results from top companies in Corporate America.
The S&P 500 gained 0.7 percent and reached an all-time high, with information technology as the best-performing sector. The index also broke above 2,600 for the first time.
The Technology Select Sector exchange-traded fund (XLK, which tracks the S&P 500 tech sector, rose 1 percent to trade at levels not seen since 2000.
The Dow Jones industrial average jumped 172 points, with Microsoft and Apple leading advancers on the 30-stock index. It hit a record high at about 11 a.m. in New York.
The tech-heavy Nasdaq composite rose 1 percent to hit an all-time intraday high. Large-cap tech stocks like Facebook, Amazon, Netflix and Alphabet all traded higher, along with biotechnology stocks.
“A lot of big tech is up big, so that’s helping us here,” said Dave Lutz, head of ETF trading at JonesTrading. He also noted that tech stocks may be getting a boost ahead of the holiday shopping season.
Consumers will be hitting the stores and scouring the internet for deals as Black Friday and Cyber Monday approach.
“All eyes are on Santa as the holiday season starts up,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. Sandven also said investors are feeling bullish heading into the earnings season as the current economic backdrop is positive for the consumer.
Investors also digested strong earnings from some of the biggest U.S. companies. Medtronic, Hormel Foods and Dollar Tree all posted better-than-expected quarterly results Tuesday before the bell, sending their stocks higher. Lowe’s also reported stronger-than-expected quarterly earnings and revenue, but its stock fell 0.5 percent.
After Monday’s close, Intuit, Palo Alto Networks and Agilent Technologies reported better-than-expected earnings.
“Earnings season is winding down and, when you look back, most companies have beaten expectations and that’s a positive for the market,” said Adam Sarhan, CEO of 50 Park Investments.
Equities built on gains made during the previous session, which arose as investors bet that tax cut would keep the current economic expansion going.
On Monday, President Donald Trump said before a cabinet meeting that his administration was going to “give the American people a huge tax cut for Christmas.”
But concerns however still linger on Wall Street, as to whether a deal will come about and be finalized by the end of the year.
Nicholas Colas, co-founder of DataTrek Research, said in a note that “if it doesn’t happen soon, there may be no second chances,” as Democrats could take a majority in both the House and Senate next year.
On the data front, the Chicago Fed National Activity Index rose in October. Existing home sales rose more than expected in October.
In the oil market, crude prices rose as investors looked ahead to a key OPEC meeting. Brent crude traded around $62.27 and U.S. WTI hit $56.88 per barrel at 11:05 a.m. ET.
Overseas, trade in Europe ticked higher, while markets in Asia ended the session mostly higher.

 
Link:
https://www.cnbc.com/2017/11/21/us-stock-futures-bumper-earnings-data-tax-on-the-agenda.html

17 Nov
Daily Market Commentary

Week-In-Review: Stocks End Mostly Higher As Tax Cut Passes House

What Is This “Dip” You Speak Of

The market remains very strong. The fact that the latest pullback literally only lasted one week speaks volumes to how strong the bulls are right now. The big news last week came after the House passed the tax cut bill. Now, the bill goes to the Senate where it will face some opposition but, in my opinion,  most likely get passed in some form. The fact that the bulls showed up (again) last week illustrates how strong the market is right now. Remember, in bull markets, weakness should be bought, not sold.

Mon-Wed Action:

Stocks fell on Monday after General Electric (GE) cut its dividend by 50% and announced a massive plan to restructure itself. On Tuesday, stocks were lower as investors continued to digest the latest round of earnings data. Overnight, China released some disappointing economic data on retail sales, industrial output and fixed asset investment growth which hurt global stocks. All of those reports missed expectations. In the U.S., the producer price index rose +0.4% in October which was stronger than the Street’s estimate for a gain of +0.1%. Stocks fell on Wednesday after the International Energy Agency slashed its outlook for oil demand. The IEA cut its growth target by 100,000 barrels per day for 2017 and 2018. Crude oil futures and a slew of energy stocks fell and dragged the market lower.

Thur & Fri Action:

On Thursday, the Dow jumped nearly 200 points after the House passed the tax reform bill and Cisco and Wal-Mart reported stronger-than-expected earnings. In fact, Wal-Mart gapped up and hit a fresh all-time high after reporting earnings which bodes well for retail stocks and the Q4 holiday shopping season. After the close, Tesla (TSLA), unveiled its new electric truck and surprised the Street when it reported a new very fast roadster. On Friday, stocks were relatively quiet as investors digested a busy week.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Get Our Free e-Book: Learn How To Buy Leading Stocks…EARLY. Get It Here…

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