30 Dec
Daily Market Commentary

Week-In-Review: 2016 Was A Strong Year On Wall Street

2016 Was A Strong Year On Wall Street

2016 will go down in the history books as a strong year on Wall Street. The major indices opened sharply lower, experiencing the weakest start to a year – ever, before the bulls showed up in mid-February and defended major support (1810 for the S&P 500). Once that level was defended, the market didn’t look back. Stocks spent the rest of the year charging higher, shrugging off all negative news and enjoying more easy money from global central banks. The U.S. Fed was going to raise rates 4 times in 2016 but only ended up raising rates once. In fact, from the low in February the benchmark S&P 500 vaulted 467 points or 25%! Meanwhile, the Dow Jones Industrial Average soared 4,537 points, from its February low, to its December high, and closed just below 20,000. For the year, stocks ended higher: The S&P 500 gained 10%, The Dow Jones Industrial Average was up just under 14%, the Nasdaq Composite increased by over 8% and the standout winner was the Small-Cap Russell 2000, soaring +20% in 2016. Even with these big gains, most of which came after Brexit and after the 2016 election, 2016 was an extremely difficult year for most active managers. In fact, it was the worst first half of the year for active managers – ever! Looking forward, fundamentally, the bulls argue, that Trump’s pro-growth policies will be good for both Main Street and Wall Street and global central banks are still very accommodative. They also point to the fact that monetary policy remains favorable with the Fed keeping rates at only +0.5%, which is very low on a historical basis. Technically, the bulls are happy and argue: the major indices broke out of a big base, positively reversed, and traced out a bullish outside reversal (2016’s high and low eclipsed 2015’s high and low- which is known as an outside reversal) to the upside- on an annual basis. That leaves us heading into 2017 with the bulls in clear control of the market. Until we see any significant selling show up, the market deserves the bullish benefit of the doubt. In the short term, the market is tired and simply pulling back to digest the strong post-election rally.

Mon-Wed Action:

Stocks were closed on Monday in observance of the Christmas holiday. The market edged higher on Tuesday on the first day of the final trading day of the year. The Nasdaq composite and Nasdaq 100 hit new 52-week highs but pulled back and closed in the middle of the daily range. The S&P Corelogic Case-Shiller home price index came in at 0.06%, beating the Street’s estimate for 0.05%. Elsewhere, consumer confidence rose to 113.7, beating estimates for 108.5. That was the highest reading since 2001 and bodes well for the market and the economy as we head into 2017. The Dallas manufacturing index came in 13.8, which was higher than the last reading of 8.8. Stocks opened higher on Wednesday but turned lower before the Dow could reach 20,000. Economic data was light. Pending home sales slid -2.5%, missing estimates for a gain of +0.5%. In other news, GNC said it will close all 4,400 US stores today to overhaul its pricing system. Anthera Pharmaceuticals (ANTH) plunged -65% after the money-losing biotech said its Phase 3 study of its Sulloura drug in cystic fibrosis patients with exocrine pancreatic insufficiency missed its primary endpoint. Today was the first “real” down day since the election rally as the market pulls back to digest its recent move.

Thur & Fri Action:

On Thursday, stocks were quiet even after the U.S. announced sanctions on individuals and organizations it believes were involved in the alleged Russian cyber interference in the 2016 election. The White House sanctioned 9 separate organizations and individuals, including two Russian intelligence agencies and four officers of its main intelligence agency. The White House also expelled 35 Russian diplomats and closed two separate compounds. Normally, you would think the Dow would be down a few hundred points on the news but stocks barely budged because President-Elect Trump will hopefully reverse these sanctions. Stocks fell on Friday after Putin said Russia will not expel anyone in response to US sanctions. Mylan ($MYL) rose 1.7 percent to $38.02 after the drug maker launched generic versions of two drugs. Economic data was light, the last economic data point of 2016 was the Chicago Purchasing Manager’s Index. The Chicago PMI came in at 54.6, missing estimates for 57. Stepping back, 2016 ended on a high note and that is bullish for the major indices heading into 2017.

Market Outlook: Strong Action

Once again, central banks came to the rescue and sent stocks racing higher. The ECB extended QE in December and will print another 2.4T to stimulate markets and the global economy. The U.S. Fed only raised rates once in 2016, by a quarter point to 0.50%, which, historically,  is still very low. As always, keep your losses small and never argue with the tape.  Schedule a complimentary appointment today –  if you want Adam to manage your portfolio or talk about your investment needs. Visit: 50Park.com

30 Dec
Media Quotes

Adam in Reuters: Wall St. Flat On Last Trading Day of 2016

Friday, December 30, 2016
Wall Street was flat after the open on the last trading day of 2016 due to losses across most sectors, but was still on track to record hefty gains for the year.
The S&P is on track to rise nearly 10 percent this year, the Nasdaq 8.3 percent and the Dow 13.7 percent.
The markets have shown surprising resilience to major political events, such as Britain’s vote in June to leave the European Union and the election of Donald Trump as U.S. president in November. 
U.S. stocks, which had not priced in a Trump victory in the run-up to the vote, marked a series of record highs on bets that his policies would spur growth.
“The prospects of growth took center stage this year, with investors hoping that the new political phenomenon will spur the economy,” said Adam Sarhan, chief executive officer at 50 Park Investments in Orlando, Florida.
This year also stands in stark contrast to 2015 when a steep drop in oil prices left the S&P 500 and the Dow nursing losses. The commodity bounced back by more than 50 percent for its best year since 2009, partly due to a deal by major producers to limit supply. [O/R]
The S&P energy index .SPNY, which was the worst performer last year, is set to become the biggest gainer among the 10 other industry sectors in 2016.
At 9:39 a.m. ET the Dow Jones Industrial Average .DJI was down 3.64 points, or 0.02 percent, at 19,816.14.
The S&P 500 .SPX was down 1.26 points, or 0.05 percent, at 2,248.
The Nasdaq Composite .IXIC was down 3.64 points, or 0.07 percent, at 5,428.45.
Eight of the 11 major S&P 500 sectors were lower, with utilities .SPLRCU and telecom services .SPLRCL taking the biggest hit.
Cabela’s (CAB.N) shares fell 6 percent to $58.14 after U.S. antitrust regulators requested additional information regarding Bass Pro Shops proposed acquisition of the hunting and fish gear retailer.
Mylan (MYL.O) rose 1.7 percent to $38.02 after the drug maker launched generic versions of two drugs.
Advancing issues outnumbered decliners on the NYSE by 1,452 to 1,094. On the Nasdaq, 1,123 issues fell and 1,092 advanced.
The S&P 500 index showed one new 52-week high and no new lows, while the Nasdaq recorded 17 new highs and 10 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)
LINK: 
http://www.reuters.com/article/us-usa-stocks-idUSKBN14J15I

28 Dec
Media Quotes

Adam in Reuters: US STOCKS- Wall Street Falls For First Time In Three Days

Wed Dec 28, 2016 | 11:25am EST
* Dollar up 0.4 pct; set for best day in nearly 2 weeks
* Boeing falls after Delta cancels order
* Microsoft, Facebook drag down Nasdaq
* Indexes down: Dow 0.09 pct, S&P 0.34 pct, Nasdaq 0.44 pct (Adds details, comments, updates prices)
By Yashaswini Swamynathan
Dec 28 Wall Street lost ground for the first time in three days on Wednesday due to declines across sectors, slowing the Dow’s race to 20,000.
The blue-chip index came within 19 points of the milestone shortly after the open, before slipping into negative territory as losses in Boeing offset Goldman Sach’s 0.86 percent gain.
Boeing fell 0.8 percent to $156.26 after Delta Air Lines said on Tuesday that it had reached an agreement with the planemaker to cancel a $4 billion order for 18 Dreamliner aircrafts.
U.S. equities have been riding a post-election rally, feeding on optimism that Donald Trump’s policies would be business friendly, especially to banks and industrials. The rally has also been supported by a spate of strong economic data.
The Dow, which has benefited the most among the three major Wall Street indexes from the Trump rally, is on track to have its best yearly gains since 2013. The S&P 500 is set to register a double-digit rise this year, compared with a 0.7 percent decline in 2015.
At 11:05 a.m. ET (1605 GMT), the Dow Jones Industrial Average was down 17.41 points, or 0.09 percent, at 19,927.63.
The S&P 500 was down 7.72 points, or 0.34 percent, at 2,261.16.
The Nasdaq Composite was down 23.97 points, or 0.44 percent, at 5,463.48.
“It looks like a bit of profit taking after a big move upwards which is perfectly healthy for the markets,” said Adam Sarhan, chief executive officer of 50 Park Investments in Orlando, Florida .
“The fact that the Dow has not gotten above 20,000 yet shows that some investors are locking in gains.”
The dollar index rose 0.4 percent and is on track for its best day since Dec. 15, helped by strong economic data on Tuesday.
All 11 major S&P 500 sectors were lower on Wednesday, with technology and consumer staples indexes being the biggest drags.
Microsoft and Facebook weighed the most on the Nasdaq.
Declining issues outnumbered advancers on the NYSE by 1,936 to 906. On the Nasdaq, 1,855 issues fell and 790 advanced.
The S&P 500 index showed 11 new 52-week highs and two new lows, while the Nasdaq recorded 73 new highs and 19 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)
Link: http://www.reuters.com/article/usa-stocks-idUSL4N1EN3CD

23 Dec
Daily Market Commentary

Week-In-Review: Bullish Pattern Develops On Wall Street; Dow Enjoys 7th Straight Weekly Gain

Bullish Pattern Develops On Wall Street

The S&P 500 is forming a bullish 3-weeks tight pattern as the major indices pause to digest the recent post election rally. So far, the action remains very healthy as sellers remain on the sidelines. The Dow notched its 7th straight weekly gain and is on track to end 2016 on a strong note. As we have highlighted for you over the past few weeks, the market is very extended and is simply consolidating its recent (and robust) rally. The quiet action we have seen over the past few weeks is very healthy as the Dow continues to trade just below 20,000. The big question for me is not if the Dow can break above 20k, but if it can stay above 20k, when it does eventually break above it. Remember, we are in a very strong bull market and until we see any meaningful selling, the bulls remain in clear control.

Mon-Wed Action:

Stocks edged higher on Monday after two separate terror attacks occurred in Germany and Turkey. The Russian Ambassador to Turkey was shot and killed while he was visiting an Art Gallery in Turkey. Separately, several people died after a truck crashed into a Christmas shopping market on the west side of Berlin. In economic news, the flash U.S. Markit PMI services for December came in at 53.4, which was slightly lower than November’s reading of 54.6. Finally, Fed Chair Janet Yellen gave a speech and said the U.S. has the strongest jobs market in nearly a decade, and there are indications wage growth is picking up. Stocks rallied on Tuesday, helping the Dow Jones Industrial Average come within striking distance of 20,000. On Wednesday, stocks were very quiet as the Dow Jones Industrial Average hovered just below 20k. Healthcare stocks lagged and oil turned negative after a surprise build in stockpiles. Economic data was very light, existing home sales for November, hit 5.61 million units, beating estimates for 5.535 million. Year-over-year, existing home sales swelled by 15.4%. A separate report showed weekly mortgage applications rose 2.5%.

Thur & Fri Action:

Stocks were quiet on Thursday as the Dow continued to trade just below 20,000. Economic data was mixed. Initial jobless claims rose to 275,000 last week, missing estimates for 256,000. Separately, durable goods for November slid by -4.6%, which estimates for -4%. On the positive side, the final read for Q3 GDP was +3.5%, beating the Street’s estimate for +3.2%. Earnings data was light but Micron (MU) gapped up while Red Hat (RHT) gapped down after releasing earnings. The major indices were very quiet today as they pause to digest the recent and strong post election rally. Stocks were quiet on Friday after President-Elect Trump said: I got a ‘very nice letter’ from Putin about improving relations.

Market Outlook: Strong Action

Once again, central banks came to the rescue and sent stocks racing higher. The ECB extended QE in December and will print another 2.4T to stimulate markets and the global economy. The U.S. Fed raised rates to only 0.50%, which, historically,  is still very low. As always, keep your losses small and never argue with the tape.  Schedule a complimentary appointment today –  if you want Adam to manage your portfolio or talk about your investment needs. Visit: 50Park.com

23 Dec
Uncategorized

Adam in @CNBC: Stocks Close Flat As Dow Fails To Reach 20,000 Ahead of Christmas

Friday 12.23.16
U.S. equities closed mostly flat on Friday ahead of the Christmas holiday, as the Dow Jones industrial average failed again to reach the psychologically important level of 20,000.
The Dow closed about 15 points higher, with UnitedHealth contributing the most gains. “This is the last full trading week of the year. The Dow has been flirting with 20,000 and what I think is happening is a pause to digest a massive move higher,” said Adam Sarhan, CEO at 50 Park Investments. “The market doesn’t go straight up. I think this market action is healthy.”
Entering Friday’s session, the blue-chips index was about 0.4 percent away from hitting 20,000, having come within 13 points of the level earlier this week.
“Santa needs to visit Wall Street in order for the Dow to get above 20,000. We know Santa is making his rounds, so if he doesn’t visit today there’s a very high likelihood he visits next week,” Sarhan said.
The S&P 500 also closed 0.1 percent higher, with health care leading advancers and consumer discretionary the greatest laggard. Health care is the worst performing S&P sector for the year, having fallen more than 3 percent. “We have avoided the health care sector. Our work shows it earnings growth is trending down,” said Chuck Self, CIO at iSectors.
The three major indexes posted slight weekly gains.

Trading volume in the U.S. evaporated this week, as most investors and traders have left their offices in light of the Christmas holiday. U.S. markets will be closed Monday in observance of the holiday.
“Many of those who work at buy side institutions have already left for the tropics or the mountains. Although the extremely thin liquidity ahead of the long weekend make stocks susceptible to a bit of bullying, shares should drift quietly during the next several hours,” said Jeremy Klein, chief market strategist at FBN Securities.
In economic news, consumer sentiment for December came in at 98.2, above the expected read of 98.0. New home sales rose 5.2 percent last month, more than expected.
Overseas, investors kept an eye on European banks, after Italy approved a state bailout for Banca Monte dei Paschi di Siena, the world’s oldest bank and the country’s third-largest lender.
Meanwhile, Credit Suisse agreed in principle to pay U.S. authorities $2.48 billion to settle claims it misled investors in residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis. Germany’s Deutsche Bank also agreed to settle a separate lawsuit with the U.S. government.
“There is finally some good news for European banking sector,” Naeem Aslam, chief market analyst at Think Markets, said in a note. “However, the holes in this sector are still far from being filled, as [Monte dei Paschi] has also asked for a rescue fund which the Italian government may have to provide as well.”
The U.S. dollar fell marginally against a basket of currencies, with the euro near $1.045 and the yen around 117.3. U.S. Treasurys traded mixed, with the two-year note yield rising to 1.20 percent and the benchmark 10-year note yield slipping to 2.54 percent.
Symbol
Name
Price
  
Change
%Change
DJIA Dow Industrials 19933.81
 
 14.93 0.07%
S&P 500 S&P 500 Index 2263.79
 
 2.83 0.13%
NASDAQ NASDAQ Composite 5462.69
 
 15.27 0.28%
The Dow Jones industrial average rose 14.93 points, or 0.07 percent to 19,933.81, with UnitedHealth Group leading advancers and Microsoft the biggest decliner.
The S&P 500 closed 2.83 points higher, or 0.13 percent, at 2,263.79, with health care leading eight sectors higher and consumer discretionary the top decliner.
The Nasdaq composite rose 15.27 points, or 0.28 percent, to end at 5,462.69.
About nine stocks advanced for every five decliners at the New York Stock Exchange, with an exchange volume of 502.26 million and a composite volume of 1.983 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.6.
High-frequency trading accounted for 52 percent of December’s daily trading volume of about 7.56 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
—Reuters contributed to this report.

LINK:
http://www.cnbc.com/2016/12/23/us-markets.html

20 Dec
Media Quotes

Adam In CNBC: Dow notches 17th record close since US election, ends about 25 points away from 20,000

Stocks rose on Tuesday, led by financials, as investors remained unfazed by geopolitical tensions, while the Dow Jones industrial average kept marching toward 20,000.
At session highs, the blue-chips index came within 13 points of hitting the milestone mark, before closing 90 points higher, after hitting a new intraday high, with Goldman Sachs contributing the most gains. The Dow also ended around 25 points away from 20,000.
“We have to put this move into perspective,” said Adam Sarhan, CEO at 50 Park Investments. “It’s not just about hitting 20,000. We’ve had a very strong rally since the election.” Since Nov. 8, the Dow has surged more than 8 percent and has posted 17 record closes.
The S&P 500 rose 0.3 percent, with financials rising more than 1 percent. The Nasdaq composite advanced 0.5 percent, also reaching a new all-time high earlier in the session.
“I think the reason we came out higher is because there was no economic data and volume is pretty light,” said Peter Cardillo, chief market economist at First Standard Financial. “The absence of any macro news has given the bulls total control of the market today.”
Art Hogan, chief market strategist at Wunderlich Securities, said “you’ll be hard pressed to find a catalyst … until we flip the calendar.” “We’re running out of things that can trip us up.”
The U.S. composite volume totaled 6.17 billion shares on Monday, the lowest since Nov. 25, when only 3 billion shares were traded, as the Christmas holiday approached. “As we go deeper into the week, the volume will continue to fall off,” said said Quincy Krosby, market strategist at Prudential Financial. “That’s important because any strong headline can skew the market in one direction or another.”
Specialist trader Mario Picone wears a "DOW Almost 20,000" cap as he works at his post on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 15, 2016.

Brendan McDermid | Reuters
Specialist trader Mario Picone wears a “DOW Almost 20,000” cap as he works at his post on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 15, 2016.
First Standard’s Cardillo also said investors were ignoring geopolitical tensions. On Monday, the Russian ambassador to Turkey died after being shot by a gunman at an art gallery in the Turkish capital. Meanwhile, in Berlin, a truck ploughed into a crowded Christmas market, killing 12 and injuring 48.
“That’s the hallmark of a bull market. When the market refuses to fall on ‘bearish news,’ that tells you that this is very strong bull market,” said 50 Park’s Sarhan.
European equities traded mostly higher Tuesday, as the pan-European Stoxx 600 index rose 0.48 percent. “If the pattern is something we’ve seen before, the market is going to look right through it,” said Prudential’s Krosby.
There are no major economic data due Tuesday, but investors had several earnings reports to chew on, with the likes of Darden Restaurants, General Mills and BlackBerry all reporting before the bell. FedEx and Nike are also scheduled to report after the close.
“Along with [Oracle], which delivered their earnings last week, and [Accenture], which will do the same tomorrow morning, these releases will offer a good preview for the upcoming reporting season,” Jeremy Klein, chief market strategist at FBN Securities, said in a note, referring to Nike and FedEx’s results.
Analysts polled by Reuters expect Dow-component Nike to report earnings per share of 43 cents on sales of 8.1 billion. FedEx is expected to post profits of $2.90 per share on revenue of $14.92 billion.
U.S. Treasurys resumed their sell-off after a slight uptick following the events in Ankara and Berlin, with the benchmark 10-year note yield rising to 2.5597 percent and the short-term two-year note yielding 1.2326 percent.
The dollar rose 0.12 percent against a basket of currencies, with the euro trading at $1.039 and the yen near 117.8.
In oil markets, U.S. crude rose 0.21 percent to settle at $52.23 per barrel amid expectations for falling U.S. stockpiles.
Symbol
Name
Price
Change
%Change
DJIA Dow Industrials 19974.62
91.56 0.46%
S&P 500 S&P 500 Index 2270.76
8.23 0.36%
NASDAQ NASDAQ Composite 5483.94
26.50 0.49%
The Dow Jones industrial average rose 91.56 points, or 0.46 percent, to end at 19,974.62, with Nike leading advancers and Merck the top decliner.
The S&P 500 gained 8.23 points, or 0.36 percent, to 2,270.76, with financials leading eight sectors higher and consumer staples the biggest decliner.
The Nasdaq composite advanced 26.50 points, or 0.49 percent, to end at 5,483.94.
About two stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 783.44 million and a composite volume of 3.221 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.4.
—CNBC’s Sam Meredith and Christopher Hayes contributed to this report.
On tap this week:
Tuesday
No reports expected
Wednesday
10:00 a.m. Existing home sales
Thursday
8:30 a.m. Initial claims
8:30 a.m. Durable goods
8:30 a.m. Real GDP
9:00 a.m. FHFA HPI
10:00 a.m. Personal income
Friday
10:00 a.m. New home sales
10:00 a.m. Consumer sentiment
*Planner subject to change.

LINK:
http://www.cnbc.com/2016/12/20/us-markets.html

16 Dec
Daily Market Commentary

Week-In-Review: Stocks End Week Mixed After Fed Raised Rates

Stocks End Week Mixed After Fed Raised Rates

Stocks ended mixed last week after the Fed raised rates for the second time in a decade and geo-political tensions flared up between the U.S. and China. Overall, stocks remain very strong and it is perfectly normal to see the market pullback and digest the recent and robust post-election melt-up. Not surprisingly, the areas that led on the way up (since the election) mostly fell last week (Financials, Steel, Materials, Industrials, Transports, just to name a few) as they pause to digest the recent rally. The Nasdaq 100 ($QQQ) broke out on Tuesday, then negated its latest breakout by Friday. At this point, the market is very extended to the upside and it would be perfectly normal to see the major indices pullback a bit to digest the recent move. Also, it is important to keep in mind, we are entering the last two weeks of the year which are a seasonally strong period for stocks. Remember, last year, the Fed raised rates in mid-December, then stocks moved sideways for the last two weeks of the year, then plunged in January-February 11th. In the short term, most indicators show the major indices are very extended/overbought so patience is king at this point.

Mon-Wed Action:

Stocks ended mixed on Monday as investors digested the recent rally and the news that broke over the weekend about OPEC and Non OPEC members reaching a deal to cut production. Oil producers around the globe reached a deal to cut production by 1.2 million barrels and this was their first major agreement to cut production since 2001. Oil opened higher but sold off and closed in the lower half of its range on a daily basis. Could be a classic case of buy the rumor and sell the fact. Stocks rallied nicely on Tuesday as the Fed began its 2-day meeting. The Dow came with a few points of hitting 20,000 and just broke above 19k, less than a month ago. Big cap tech made a come back, helping the tech-heavy Nasdaq 100 to breakout of a big base on hit new highs. Since the election, tech stocks have largely lagged so it is very encouraging for the bulls to see them kick back into gear.
Stocks fell on Wednesday after the Fed raised rates for the second time in a decade. The Fed raised rates by a quarter point and raised their target to 0.5-0.75%. This was the first rate hike in a year and the second in a decade. The Fed said it wants to raise rates 3 times in 2017 but of course that can change. Last year, they said they were going to raise rates 4 times in 2016, and they only raised rates 1 time this year. Yellen also left the door open and said monetary policy is not on a preset course. Separately, retail sales missed estimates and a slew of big tech leaders met with President-Elect Trump.

Thur & Fri Action:

Stocks rallied on Thursday as buyers showed up one day after the Fed raised rates for the second time in a decade. The US dollar surged to a 14-year high as investors believe the Fed will raise rates more aggressively in 2017. In economic news, CPI (Consumer Price Index) increased by +0.2% last month which matched estimates. Elsewhere, weekly jobless claims came in at 254,000. The Philadelphia Fed business index rose to 21.5 beating November’s reading of +7.6. Finally, the Empire State manufacturing index increased to 9.0 in December from 1.5 in November. Stocks edged higher on Friday as the Dow flirted with 20,000. Stocks slightly lower on Friday causing the major indices to close mixed for the week. Overnight, China captured an underwater U.S. drone which caused tension. Housing starts plunged nearly 19% in November which bodes poorly for the housing market. Remember, that came before the Fed raised rates.

Market Outlook: Strong Action

Once again, central banks came to the rescue and sent stocks racing higher. The ECB extended QE in December and will print another 2.4T to stimulate markets and the global economy. As always, keep your losses small and never argue with the tape.  Schedule a complimentary appointment today –  if you want Adam to manage your portfolio or talk about your investment needs. Visit: 50Park.com

09 Dec
Daily Market Commentary

Week-In-Review: Central Banks Send Stocks Soaring…Again

Central Banks Send Stocks Soaring…Once Again

The melt-up continues as the market simply refuses to fall or even pullback and that strength needs to be respected. We know way too many people who are trying to fight this very strong bull market – to no avail. Last week, we wrote about the fact that the market was getting in trouble because the Nasdaq 100 erased its entire post election rally. Clearly, someone is reading, because, once again, global central banks stepped in and saved the day. Last week, the ECB extended QE (print more money) by 2.4 trillion euros. That is not an insignificant sum! The annual chart of the market is very strong and this rally looks like it will continue for the near future. Just a quick not of caution, once bull markets do not top out when things look bleak, they top out when everything looks great. Also, as mentioned earlier this year we could enter a blow-off top which means stocks could just surge like they did in 1999 (and prior tops) until the market losses steam and we see sellers emerge. On the positive side of the spectrum: financials, transports, steel, and industrials continue to lead. Keep in mind, we are approaching the end of the month, quarter, and year – which is a seasonally strong period for the market. Looking forward, the market is looking forward to the Fed meeting on Dec 13-14. It is a largely a foregone conclusion that they will raise rates by a 0.25. In the short term, markets are very extended and we would be remiss not to note that a pullback would be extremely normal and healthy at this juncture.

Mon-Wed Action:

Stocks rallied on Monday after Italy voted “no” on their referendum to reform the constitution. Italy’s Prime Minister, Matteo Renzi, resigned after his party lost and the “no” vote won. Overnight, futures were down slightly but they turned higher as the euro reversed from a big loss on the news. Once again, markets are adopting to the new reality on the ground. It took markets 3 days to recover from the Brexit vote, less than one day to recover from the U.S. election initial sell off, and only a few hours to recover from Sunday’s vote. Steel stocks and financials remain strong as investors look forward to Trump’s pro-growth policies.
Stocks edged higher on Tuesday helping the Dow Jones Industrial Average hit a fresh record high in quiet trade. Economic data was relatively quiet. The Labor Department said U.S. productivity rose at an annualized rate of +3.1% in Q3. The U.S. trade deficit widened to $42.6 billion and October factory orders, rose 2.7 percent, matching estimates.
Stocks soared on Wednesday one day before the ECB meeting. The fact that stocks soared one day before Draghi announced more easy money may lead some to question whether or not the information was leaked. Eitherway, Financials, Steel, & Transports, were some of the areas that led the market higher. Overnight, India’s central bank unexpectedly kept interest rates unchanged. The benchmark repurchase rate stayed at a six-year low of 6.25%. Time magazine named Donald Trump The Person Of The Year.

Thur & Fri Action:

Stocks rallied on Thursday after the ECB held rates steady and extended QE until December 2017. Currently, the ECB is buying 80 billion euros a month and that will drop down to 60 billion starting in April 2017. Financials, transports, steel, industrials, materials, and other areas that are working continued to run and are now very extended by any normal measure. Stocks were strong on Friday as investors continued to send stocks higher.

Market Outlook: Strong Action

Once again, central banks come to the rescue and send stocks racing higher. As always, keep your losses small and never argue with the tape.  Schedule a complimentary appointment today if you want to talk to Adam about your portfolio. Visit: 50Park.com

07 Dec
Media Quotes

Adam in CNBC: Dow, S&P and transports close at all-time highs as stocks surge more than 1%

Wednesday, 7 Dec 2016 | 4:33 PM ET

BofA: Risk/reward more important than absolute targets  
U.S. equities closed sharply higher on Wednesday as the Dow and S&P hit new record highs, while investors awaited a monetary policy announcement from the European Central Bank.
The S&P 500 erased earlier losses to gain around 1.3 percent, with telecoms rallying around 2.4 percent to lead advancers.
“This 2,219 level [on the S&P] was on where a lot of people were expecting to see some resistance, and we went through it like a hot knife through butter,” said JJ Kinahan, chief market strategist at TD Ameritrade, adding stocks were also boosted by some short covering. “A lot of people have been saying ‘this is the end’ and have ended up with very little money in their hands.”
The Dow Jones industrial average gained nearly 300 points, with Home Depot, IBM and Goldman Sachs contributing the most gains. The Dow Transports, meanwhile, hit their first intraday high since 2014 and closed at an all-time high. Since Nov. 8, transports have risen more than 12 percent.
“I think this is more momentum from the Trump rally,” said Adam Sarhan, CEO at 50 Park Investments. “You’ve got the financials, transports, steel stocks, small and mid-cap stocks all trading higher. The areas that have worked [since the election] continue to work.”
“While all this is happening, you’ve seen virtually no selling. That’s very good for stocks moving forward,” he said.
The Nasdaq composite rose 1.2 percent despite the iShares Nasdaq Biotechnology ETF (IBB) shedding around 3 percent. The small caps Russell 2000 and the S&P Mid Cap 400 closed at record highs.
Maris Ogg, president at Tower Bridge Advisors, said “we might get a correction” in the near term, “but there is so much low-hanging fruit that some of these reforms are going to be enacted. Recognizing that some of the problems we’ve had have been because of poor policy, they can be easily corrected.”
As of Wednesday’s close, the Dow has posted gains in 18 of the past 22 sessions and 12 record closes since the election. The S&P and the Nasdaq, meanwhile, have risen 4.8 percent and 3.9 percent since Nov. 8, respectively.
“We’ve obviously had a pretty significant run over the past few weeks, but with hardly any down days,” said Art Hogan, chief market strategist at Wunderlich Securities. “The market is trying to price in a paradigm of fiscal stimulus and deregulation.”
President-elect Donald Trump stunned the world by defeating former Secretary of State Hillary Clinton in the U.S. presidential election with optimism for greater infrastructure spending and deregulation of certain sectors propelling the sharp increase in stocks since Nov. 8.
“Yesterday’s ‘checkmark’ pattern traced by the S&P 500 offered another reminder of large institutions plowing cash into shares in a determined effort to boost their positioning. Despite this consistent risk extension since Donald Trump’s shocking victory over Hillary Clinton, my most reliable sentiment indicators suggest that many portfolio managers still have the ability to increase their stock holdings substantially,” said Jeremy Klein, chief market strategist at FBN Securities, in a note.
Investors also looked ahead to a key ECB meeting, in which the central bank is largely expected to extend its quantitative easing program beyond March 2017, particularly after a Sunday referendum in Italy left the country’s banks in a vulnerable spot. “Now remember, this is the same [ECB President] Mario Draghi that says more than he does,” said Wunderlich’s Hogan. “I think the market is heading into this meeting with the expectation of more action” being taken.
There are no major U.S. economic data due Wednesday, one week before a Federal Reserve meeting in which the U.S. central bank is expected to raise interest rates. According to the CME Group’s FedWatch tool, market expectations for a 25-basis-point increase in rates were around 95 percent.
The U.S. dollar has risen sharply over the past month on expectations of higher rates and fiscal stimulus. On Wednesday, however, the greenback fell 0.21 percent against a basket of currencies, with the euroaround $1.076 and the yen near 113.8.
“November’s Trump effect still fuels the Dollar with optimism over Donald Trump implementing fiscal stimulus measures reinforcing expectations of an improvement in overall US GDP. A strong rise in inflation from healthy growth could force the Federal Reserve to raise US interest rates aggressively in an effort to prevent the economy from overheating,” Lukman Otunuga, research analyst at FXTM, said in a note.
U.S. Treasury yields fell across the board, with the two-year note yield trading around 1.10 percent and the benchmark 10-year yield near 2.35 percent.
In oil markets, West Texas Intermediate futures for January deliverysettled 2.3 percent lower at $49.77 per barrel as doubts over an agreed upon OPEC production cut persisted, despite a reported drawdown of 2.4 million barrels by the Energy Information Administration.
Overseas, European stocks traded higher, with the pan-European Stoxx 600 index gaining 0.9 percent. In Asia, stocks closed mostly higher, with the Shanghai composite advancing 0.71 percent and the Nikkei 225 gaining 0.74 percent.

The Dow Jones industrial average rose 297.84 points, or 1.55 percent, to close at 19,549.62, with Nike leading advancers and Pfizer the biggest decliner.
The S&P 500 gained 29.12 points, or 1.32 percent, to end at 2,241.35, with telecommunications leading 10 sectors lower and health care the only decliner.
The Nasdaq composite advanced 60.76 points, or 1.14 percent, to 5,393.76.
About four stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 1.032 billion and a composite volume of 4.416 billion.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.8.
—CNBC’s Peter Schacknow contributed to this report.
On tap this week:
Wednesday
Earnings: Costco, Lululemon Athletica, H and R Block
Thursday
Earnings: Sears Holdings, Broadcom, Restoration Hardware, Ciena, Hovnanian
8:30 a.m. Initial claims
Friday
Earnings: Vail Resorts
10 a.m. Consumer sentiment
10 a.m. Wholesale trade

LINK: http://www.cnbc.com/2016/12/07/us-markets.html

05 Dec
Media Quotes

Adam in Reuters: Dow set to open at record high; oil hits $55

Mon Dec 5, 2016 | 9:02am EST
By Yashaswini Swamynathan
The Dow was poised to open at an all-time high on Monday, as oil prices topped $55 a barrel for the first time in 16 months, and investors shrugged off the defeat of a referendum in Italy for constitutional reforms.
Futures lost ground slightly on Sunday after Italian Prime Minister Matteo Renzi said he would resign following the rejection.
However, world stocks, including Italian shares, reversed course to trade higher on Monday as investors bet against immediate snap elections in the country.
Brent crude prices were up 0.8 percent, after touching a high of $55.33, taking the total gains to 19 percent since Wednesday, when OPEC and other producers struck a deal to limit output to prop up prices. [O/R]
The Dow will open at a record intraday high, its eighth since Nov. 10, if active trading follows movement in futures. The index has marked four straight weeks of gains, benefiting from investors’ rotation into sectors such as financials, which are likely to gain from President-elect Donald Trump’s policies.
“You’ve got a very split tape with some sectors working well, like the financials and transports, while the rest of the market is not working well,” said Adam Sarhan, chief executive at Orlando, Florida-based 50 Park Investments.
However, Wall Street closed little changed on Friday as investors booked profits off bank stocks, despite a strong payrolls report that strengthened the prospects of an interest rate hike next week.
Dow e-minis 1YMc1 were up 73 points, or 0.38 percent, at 8:28 a.m. ET (130 GMT), with 57,797 contracts changing hands on Monday.
S&P 500 e-minis ESc1 were up 6.5 points, or 0.3 percent, with 249,606 contracts traded.
Nasdaq 100 e-minis NQc1 were up 17.5 points, or 0.37 percent, on volume of 39,369 contracts.
An Institute of Supply Management report is likely to show activity in the U.S. services sector rose slightly in November from the previous month. The report is due at 10:00 a.m. ET (1500 GMT)
New York Federal Reserve President and permanent voting member William Dudley said Trump’s election had created “considerable” uncertainty on the policies he would pursue so it was too soon for the Fed to judge whether its plan for gradual interest rate hikes needs adjusting.
Shares of Energy Transfer (ETP.N) dropped 6.9 percent to $32 after the U.S. Army Corps of Engineers turned down a permit for the company’s controversial pipeline project running through North Dakota.
FairPoint (FRP.O) shares jumped 14.4 percent after Consolidated Communications (CNSL.O) said it would buy the broadband service provider in an all-stock deal valued at $1.5 billion, including debt.
Chesapeake Energy (CHK.N) rose 4.2 percent to $7.53 after the U.S. natural gas producer said it would sell a part of its acreage in the Haynesville Shale area for $450 million to a private company.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)
Link: 
http://www.reuters.com/article/us-usa-stocks-idUSKBN13U1HY?il=0

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