Picks of the Day December 22, 2017.
Ho Ho Ho, Santa Where’s the Dough?!
The 3 large indexes on Wall Street recorded gains on Thursday, led higher by bank and energy stocks as investors placed their bets on the sectors most sensitive to the economy.
The energy sector (XLE) and the financial sector (XLF) were the drivers behind the gains on the 11 S&P 500 sectors. The financial sector has recorded gains of 21% year-to-date, compared to the gains of 20% on the S&P 500. In contrast, the energy sector has lagged behind this year, trading off 4.2%. It could be that Thursday signified a rotation to stocks that are especially sensitive to the economy.
The crude giant, Chevron (CVX), soared 3.3%, having earlier hit a historic high at the $125.35 level, after the brokerage firm, Cowen&Co. raised its price target for the stock by almost 30% to $160!
The optimism about economic growth stems from Congress having passed its $1.5 trillion tax reform earlier in the week. The bills will lower the corporate tax rate to 21% from 35%. Investors are hopeful that the lower corporate tax rate will spur companies to spend more on cash dividends and open-market stock buybacks.
In Summary for the Day: The Dow Jones rose 0.23%, the S&P 500 tacking on 0.2%. The NADSAQ ended slightly up by 0.06%.
About 6.08 billion shares traded hands on U.S. exchanges, beneath the 6.88 billion average over the last 20 trading days.
Friday: Officially, the timeframe for a Santa Claus rally would start today; historically, the rally spans the last 5 trading days of the year and ends on January 3rd, two days into the new trading year.
Some strategists are skeptical about the prospects of a Santa Claus rally developing this year, seeing that the S&P 500 is already up 20% on the year, with a surge of 5% in the last 5 weeks alone. Besides the deals speculators are looking for to profit from the rally, the phenomenon in of itself serves as an indicator for the coming year. The time-honored saying on Wall Street is “If Santa Claus should fail to call, bears will come to Broad and Wall.” Statistically, the phenomenon of a Santa Claus rally has led to average gains of 1.3% over the abovementioned 7 day period.”
More than anything, a Santa Claus rally is likely to serve as an apt indicator of the market’s defences, or the lack thereof! On the last 6 occasions that Santa Claus didn’t show up in the outgoing year, on 3 instances the market ended flat in the incoming year: 1994, 2005, and 2015. Two of the years, though, even put the bears in the driver’s seat: 2000 and 2008. In 2016, the S&P 500 shed 2% during the period in which we would have hoped for a Santa Claus rally – and then continued to fall 10.5% during January, in one of the worst starts ever to a trading year. In the end, the bottom was set on February 11th, and from thereon, the tide turned, 2016, then boasting gains of 9%!
The Economic Diary is now jam-packed leading up to the end of the year. Today will kick off with durable goods orders alongside private income and spending at 8:30 N.Y. time. Later in the day, after trading has begun, investors will await new home sales and the University of Michigan Consumer Confidence Index at 10:00.
Friday’s Hot Stocks: NKE, CAMP, CTAS, SGH
IPOs: ICLK (a small issue)
Have a great trading day!
|Monday||10:00||Housing Market Index||70||Medium|
|Tuesday||8:30||Housing Starts||1.240 M||Medium|
|Wednesday||10:00||Existing Home Sales||5.520 M||Medium|
|Thursday||8:30||Jobless Claims||234 K||Medium|
|Thursday||9:00||FHFA House Price Index||0.4 %||Medium|
|Friday||8:30||Durable Goods Orders||2.0 %||Medium|
|Friday||8:30||Personal Income and Outlays||0.4 %||Medium|
|Friday||10:00||New Home Sales||650 K||Medium|
|Friday||8:30||Empire State Mfg Survey||-0.1||Medium|
|KB||KB Financial Group Inc.||AM||Monday|
|DRI||Darden Restaurants, Inc.||AM||Tuesday|
|NAV||Navistar International Corporation||AM||Tuesday|
|WOR||Worthington Industries, Inc.||AM||Tuesday|
|MU||Micron Technology, Inc.||PM||Tuesday|
|RHT||Red Hat, Inc.||PM||Tuesday|
|GIS||General Mills, Inc.||AM||Wednesday|
|MLHR||Herman Miller, Inc.||PM||Wednesday|
|BBBY||Bed Bath & Beyond Inc.||PM||Wednesday|
|CAG||Conagra Brands, Inc.||AM||Thursday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy”
No.1 – SKX
|Company Name||Skechers U.S.A.|
|Sector||Consumer Goods | Textile – Apparel Footwear & Accessories|
Today’s Picks – Swing “New-York Strategy”