Picks of the Day December 12, 2017

Bitcoin Rocks the House!

If you thought that things had gotten out of control in bitcoin’s trading, it seems like you haven’t seen anything yet! It’s worth taking a minute to note what JPMorgan Chase, CEO, Jamie Dimon said about people who buy bitcoin: “If they’re stupid enough to buy it,” they’ll pay the price in the future. Are bitcoin traders laughing in Dimon’s face? Well why wouldn’t they be?! Having debuted on Sunday at 18:00 Eastern Time, bitcoin futures are trading up over $3,000 already. They started off on the Cboe Global Market Inc.’s exchange at $15,000, trading at $18,590 as of this writing. The bitcoin itself has risen in lockstep with futures.

On to the main indexes, a rally in tech and telecom companies sent the S&P 500 and the Dow to end at new all-time highs. A pipe bomb terrorist attack in N.Y.’s underground did little to deter investors whose sights were trained on the FOMC announcement this Wednesday. The consensus is that we’ll almost definitely see a third and final rate hike this year. The European Central Bank (ECB) and the Bank of London are also on track to make monetary policy announcements this week.

Telecom was up 1.2%, chip makers sending the tech sector up on the day. Advanced Micro Devices (AMD) was up 2.2%. Nvidia (NVDA) saw gains of 1.7%.

Apple (AAPL), more than any other company was in the headlines, continuing its seemingly meteoric rise after announcing that it was acquiring song-identification app Shazam. According to Recode, the deal is worth about $400 million. Shazam has a loyal base who use its app about 20 million times a day, according to the company site.

On the macro front, U.S. job openings fell to under 6 million for October from a record 6.18 million in September. Crude gained more than 1%on the day.

There’s no doubt that from geopolitical concerns, to bitcoin’s volatile trading, political rancor, a razor-thin Republican Senate majority, ongoing allegations about Trump’s inappropriate sexual advances and a tax bill that still hasn’t made it through both chambers of Congress, we’re not necessarily in for clear sailing. The market, though, hasn’t stopped climbing and whatever the naysayers may say, the market’s run this year has been breathtaking! Betting against the bitcoin is one thing, but to expect the market to see a hairpin turn and start nosediving … “Don’t bet the house on it!”

Systelligence LLC CEO, Kevin Miller, seems to take the very same approach. “Normally you would expect a huge pullback in an environment like this, but there are a lot of reasons this rally is sustainable, and if the tax bill gets passed, the market will continue to go higher.”

And the numbers are there to back it up! The National Association of Manufacturers (NAM), in its quarterly survey of 14,000 large and small manufacturers, found that optimism hasn’t been so high in 20 years. Almost 63% of respondents said that business tax reform would do the trick, encouraging capital spending. More than half said they would expand their business.

NAM CEO, Jay Timmons, commenting on the relevancy of the report, noted: “These incredible numbers demonstrate the absolute urgency of getting tax reform signed into law because manufacturers are saying loudly and clearly that more jobs, better pay and manufacturing growth are on the horizon.” Timmons added, “This also serves as a warning to lawmakers: Fail to get this done, and American manufacturing workers will suffer the consequences of inaction.”

In brief, keep your eyes peeled on tax reform. That’s what’s most likely to be driving the market. Will the Alternative Minimum Tax (AMT) be included or not? The House’s version didn’t have it, the Senate’s did. All of these things, the shape and the contours of the tax bill, will have far reaching ramifcations on each and every industry they touch. More than anything, it will affect the bottom line of tech companies and other firms with loads of cash overseas waiting to be repatriated, as well as local manufacturers, who pay a higher corporate tax rate than companies with a global reach. We can’t say it enough, lower taxes for corporations and for the wealthy might not be good for the “average Joe” but they sure will beef up stockowner dividends, pad earnings and enable more open market buybacks, which will increase share’s EPS even more.

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Today’s Economic Diary: The FOMC meeting begins today. The NFIB Small Business Optimism Index will be released at 6:00 AM, the Treasury Budget coming out at 2:00 PM.  

Tuesday’s Hot Stocks: FOXA, CMCSA, BA, CASY, DIS

Have a great trading day!

Economic Calendar


DAYTIME (EST)EventForecastImpact
Monday10:00JOLTS6.100 MMedium
Tuesday FOMC Meeting Begins  
Tuesday6:00NFIB Small Business Optimism Index104.2 Medium
Tuesday8:30PPI0.3 %High
Wednesday8:30Consumer Price Index0.4 %High
Wednesday10:30Oil InventoriesLow
Wednesday14:00FOMC Meeting Announcement High
Wednesday14:30Fed Chair Press Conference High
Thursday8:30Jobless Claims239 KMedium
Thursday8:30Retail Sales0.3 %Medium
Thursday8:30Import and Export Prices0.7 %Medium
Thursday10:00Business Inventories-0.1 %Medium
Friday Quadruple Witching  
Friday8:30Empire State Mfg Survey-0.1Medium
Friday9:15Industrial Production0.3 %Medium



Earning Calendar


CASYCasey’s General Stores, Inc.PMMonday
PAYVeriFone Systems, Inc.PMTuesday
BF-ABrown-Forman CorporationAMWednesday
DVMTDell Technologies Inc.AMThursday
COSTCostco Wholesale CorporationPMThursday
ADBEAdobe Systems IncorporatedPMThursday
ORCLOracle CorporationPMThursday
JBLJabil Inc.PMThursday






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