05 Jan
Daily Market Commentary

Week-In-Review: 2018 Opened With A Bang

2018 – Rally Continues

2018 opened with a bang! Not only did the major averages continue to hit new record highs, there was virtually no selling to speak of. Clearly, this is very strong action and it tells you that the bulls remain in control as sellers remain virtually no where to be seen. What does that mean for 2018? Based on historical precedent, odds favor, 2018 will be another strong year on Wall Street. In 2017, the Dow rallied +25% and that has happened ten times since 1950. Only two of those times did the market fall in the following year and it continued to rally 8 times. Out of the 8 up years, 6 of them were up double digits and the average yearly gain (after a 25% year) was +12.6%. The data suggests that 2018 will most likely be a positive year but history also shows us that volatility should pick up. Stay tuned…

Mon-Wed Action:

Stocks were closed on Monday for New Years. On Tuesday, the Dow opened up over 100 points as investors opened the new year with a bang. According to Ryan Detrick, from LPL, “Does the 1st trading day of the year matter? Sounds random, but … Past 20 years, on the 1st day of a new year the S&P 500 has been higher 10 times and lower 10 times. Full year return if up the first day? +14.2%. Full year return if down the first day? -0.6%” Just some food for thought and it would surprise nearly everyone if stocks rallied sharply again this year. My clients know that, until we see any signs of weakness, I’m bullish on the market. On Wednesday, stocks continued to rally and big money flowed into nearly all areas of the market.

Thur & Fri Action:

Stocks rallied on Thursday as a lot of money flowed into the semi-conductor group. Most of the semi-conductor stocks were pausing for a few weeks as they consolidated a big move in 2017. For now, the move continues and tech stocks in general remain exceptionally strong. Stocks rallied sharply on Friday after the government said, U.S. employers added +148,000 new jobs last month, missing estimates for 191k.

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. What’s Stopping You From Achieving Your Goals? Answer: Your Mental Walls…Learn More Here

29 Dec
Daily Market Commentary

Week-In-Review: 2017 Another Solid Year For Stocks

2017 – Another Solid Year For Stocks

2017 will go down in history as another solid year for Wall Street. The major averages all surged to fresh record highs as volatility remained exceptionally low. There were several bullish macro catalysts for the strong rally on Wall Street, most notably: Strong GDP, Corporate Earnings, Low Interest Rates From Global Central Banks, and the strong year ended with a big tax cut. The market remains very strong as investors continue to show up and buy every dip. The one big concern as we head into 2018 is that a lot of time has passed since we have seen a meaningful pullback or a correction of any sort. The last meaningful sell-off was in Jan-Feb 2016, since then stocks have soared. Additionally, the last bear market was in 2008-2009 which makes this the second longest bull market in history. Bottom line, the market remains exceptionally strong until we see any selling on Wall Street. 

Mon-Wed Action:

Stocks were closed on Monday for Christmas. On Tuesday, the market was quiet after shares of Apple Inc (AAPL) gapped down on a report that the new iPhone X sales are sub par. The bulls showed up and defended the 50 day moving average line for Apple which is a healthy sign. Separately, the Wall Street Journal reported that U.S. retailers had a good Holiday Shopping season which made up for an other wise lousy year. That news helped a slew of retail stocks to rally. Remember, retail stocks have been under pressure for the past few years as shares of Amazon (AMZN) continue to soar to new record highs.
On Wednesday, stocks closed slightly higher as utilities and real estate stocks rallied. Trading volume was very light and was one of the quietest days of the year. Big money is moving back into the beaten down commodity sector as valuations remain stretched to the downside. In a bullish note, Copper prices soared to the highest level since 2014 as investors look forward to the infrastructure plan in 2018.

Thur & Fri Action:

Stocks were quiet on Thursday as money rotated back into tech stocks after a few day breather. In another illustration of strength, on a monthly basis, the major averages are setting more records. The Dow Jones Industrial Average is on pace for its first nine-month winning streak since 1959 and the S&P is on track for its first nine-month winning streak since 1983. Stocks fell on Friday which was the last trading day of the year.

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…

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…

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…

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…

10 Nov
Daily Market Commentary

Week-In-Review: Stocks Snap 8-Week Win Streak

Stocks (Finally) Snap 8-Week Win Streak

Remember, ladies and gentlemen, stocks do not go up forever. Even in very strong bull markets (present market included) it’s perfectly normal (and healthy) to see the market pullback and digest a recent rally. Last week, the major indices ended lower and the benchmark S&P 500 and Dow Jones Industrial Average both snapped a very strong 8-week win streak. One relatively small down week after 8 strong up weeks is perfectly normal – and healthy. The key now is to analyze the health of this pullback to see if it turns into another small/healthy pullback or something more severe. The first big level of support to watch for the major indices is the 50 day moving average line. As long as the market stays above that level, the bulls remain in clear control. I welcome this pullback with open arms and will look to buy the bounce after this pullback is over.

Mon-Wed Action:

Stocks closed at fresh record highs on Monday after Broadcom (AVGO) offered to buy Qualcomm (QCOM) for $70 a share. If completed, the deal would be the largest tech deal – ever. Separately, shares of Advanced Micro Devices ($AMD) jumped on deal making news and Disney (DIS) hinted it would want to acquire 21st Century Fox (FOX). Stocks fell on Tuesday after financials dragged the market lower. Separately, shares of Priceline (PCLN) gapped down after reporting earnings. Overnight, Democrats won a few big races which put some pressure on the GOP. Financials and junk bonds (JNK) continued to fall which put pressure on the market. Financials are under pressure from a flattening yield curve. Stocks edged higher on Wednesday.

Thur & Fri Action:

On Thursday, the Dow fell as much as 250 points intra-day (but ended down 101 points) – after fear spread that the tax bill will be delayed. The small-cap Russell 2000, has been under pressure recently because small-cap companies have more to gain from an immediate domestic tax cut since they are more likely to be U.S.-based and not have a huge multi-national footprint. Stocks were relatively quiet on Friday as the market digested a busy week of data.

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…

03 Nov
Daily Market Commentary

Week-In-Review: Stocks Rally On Strong Economic & Earnings Data

Stocks Rally On Healthy Earnings and Economic Data

The market ended mostly higher last week as investors digested a slew of earnings, economic and central bank data. First, nearly every major central bank in the world continues its easy money stance. Even though the Fed, and a few other central banks, began raising rates, rates are still extremely low and they are doing so at a very measured (a.k.a. slow) rate. Also, if the market, or the economy, deteriorates, one would expect global central banks to stop raising or actually lower rates (depending on how steep the market/economy declines). That phenomenon is also known as the central bank put. That has been the prevailing bullish logic since the financial crisis. Second, economic data remains healthy as the market is now hoping for a big tax cut that will stimulate the economy. Finally, earnings continue to come in above estimates and that is another net positive. Stepping back, I know the market is extended to the upside so I wouldn’t be surprised to see another near term pullback unfold. Remember, eventually, this very strong bull market will end, but until it does, there is no point in fighting it.

Mon-Wed Action:

Stocks fell on Monday after Robert Mueller indicted Paul Manafort and Manafort’s right hand man. The charges against Mr. Manafort came from before he was the head Trump’s campaign. But they are serious nonetheless. Stocks largely pulled back on Monday to digest Friday’s very strong rally. Tuesday was the last day of October and the Dow & S&P 500 both enjoyed their 7th straight monthly gain. In fact, over the past year, the Dow & S&P 500 have been up 11 of the past 12 months. That is exceptionally strong. On Wednesday, stocks were quiet as the Fed decided to hold off and raise rates later in the year. That was largely expected so it was a non-event.

Thur & Fri Action:

Stocks were relatively quiet on Thursday as investors continued to digest a slew of data. According to Reuters, earnings remain strong. So far, close to 75% of the companies that have reported earnings have beat estimates, while 67% have surpassed sales estimates. Before Friday’s open, the Labor Department said, U.S. employers added 261k new jobs last month, missing estimates for 325k. Meanwhile, the unemployment rate slid to 4.1% which beat estimates for 4.2%.

Market Outlook: Bulls Are Running

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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