January 25, 2018.

Market Drops from Intraday High

Yesterday, after all of the major indexes had hit intraday highs earlier in trading, they summarily fell, only the blue chip Dow coming out marginally up. It was a day that saw a lot of twists and turns, from Treasury Secretary, Mnuchin’s comment that signaled Trump’s policy preference for a weak dollar, to GE’s shockingly large insurance loss – and news of an SEC investigation – and a massive fine imposed on Qualcomm by the European Commission for its under the rug payments to Apple.

Wall Street honed in on the comments of President Trump’s Treasury Secretary, Steven Mnuchin, who said the administration supports “bilateral trading agreements.” He also noted, “a weaker dollar is good for trade.” The U.S. dollar, which tumbled 10% last year, traded yesterday at a new three year low. Who does a weak dollar benefit? The obvious answer is multinational companies, vying for market share in price-competitive service and product offerings. The comments made by Mnuchin, though, also had an effect on the home front, pushing up yields on the 10-year T-bond; a weaker dollar can undermine demand for government bonds.

The greatest fear perhaps in the marketplace, besides Trump’s protective trade measures, is high stock valuations. In gauging valuations some look at the standard Price/Earnings ratio; others look at what’s called CAPE. CAPE refers to the Cyclically Adjusted Price Earnings ratio.

Index Summary: The Dow rose 0.16% to record a new record, led by gains in Goldman (GS) which rose 2.15% and American Express (AXP) which climbed 1.35%. Apple (AAPL), though, shed 1.59%. The S&P 500 fell 0.06%, the tech-heavy NASDAQ falling 0.61%. All-in-all, the three indexes are up between 6% and 8.1% this year, riding the wave of higher corporate profits. Whereas the PE on the S&P 500 is slightly higher than the level seen before the Great Crash in the 1920s, Capital Economics Chief Market Economist, John Higgins, noted, “Nonetheless, the CAPE remains well below its all-time high of just above 44, which it reached in December 1999, before the dot-com bubble burst.”

Qualcomm (QCOM) was definitely in the spotlight yesterday, after word broke that it was undercutting competitors like Intel (INTC) by making illegal payments to Apple to ensure the latter would only use its chips for its iPhones and iPads. At present, Apple is not under investigation in the said claim. That notwithstanding, with its $1.2 billion fine, the European Commission has solidified itself as the strongest governmental force in the world in anti-trust regulation and enforcement. Both Qualcomm and Apple benefitted from the ongoing collusive arrangement which muscled out competitors and hurt consumers.

General Electric (GE), which was already under SEC investigation, got worse news yesterday, the SEC announcing that it was also investigating the company’s whopping insurance charge. GE slipped 2.7%. The conglomerate has been trying to shed legacy businesses, finding that comes at a very large cost.

Comcast (CMCSA) rose 1.3%, after reporting an earnings boost from broadband; it also announced a $5 billion stock repurchase plan for 2018. Texas Instruments (TXN) fell 8.5% after releasing in-line results, coupled with a modest outlook.

One industry that took a big hit yesterday was the airline industry. The bloodbath was prompted by United Continental Holdings (UAL) which fell 11%. The company precipitated a panic after announcing expansion plans. The finances of the airline industry are such that when companies compete in a new market the way they do it is by undercutting each other. That put shock waves through the industry and market players who remember the last price war and what it did to bottom-line earnings.

United President Scott Kirby, though, defended its growth strategy. He said that the company had lost market share to Delta and American and that now it had to catch up. Kirby noted that United was losing high-paying connecting passengers flying between small cities and big airports. “The best way to compete with a low-cost carrier is matching prices,” noted Kirby. “No one chooses to fly on an ultra-low-cost carrier if they can get the same price on United Airlines, nobody.”

Today’s Economic Calendar: International trade numbers and jobless claims will be released at 8:30, with both wholesale inventories and new home sales numbers coming out at 10:00.

The U.S. IHS Markit flash services PMI dropped in January to 53.3. The manufacturing figure climbed to 55.5. Like always, a reading of 50 or higher means expansion. Existing home sales came out at a seasonally adjusted annual clip of 5.57 million for December, beneath the consensus of a rate of 5.73 million.



Daily change

DJX 26,252.12 +41.31 (0.16%)
SPX 2,837.54 -1.59 (-0.06%)
NASDAQ 7,415.06 -45.23 (-0.61%)

Thursday’s Hot Stocks: LVS, DFS, FFIV, WHR, F, AAPL

Have a great trading day!

                                              Economic Calendar


DAY TIME (EST) Event Forecast Impact
Wednesday 9:00 FHFA House Price Index 0.5 % Medium
Wednesday 10:00 Existing Home Sales 5.750 M Medium
Wednesday 10:30 Oil Inventories -6.9 M barrels Low
Thursday 8:30 International Trade in Goods
$-68.9 B Medium
Thursday 8:30 Jobless Claims 240 K Medium
Thursday 10:00 Wholesale Inventories 683 K Medium
Thursday 10:00 New Home Sales 0.5 % Medium
Friday 8:30 Durable Goods Orders 0.8 % Medium
Friday 8:30 GDP 2.9 % High


Earning Calendar


Symbol Company AM/PM Day
STT State Street Corporation AM Tuesday
KMB Kimberly-Clark Corporation AM Tuesday
VZ Verizon Communications Inc. AM Tuesday
PG The Procter & Gamble Company AM Tuesday
JNJ Johnson & Johnson AM Tuesday
TXN Texas Instruments Incorporated PM Tuesday
COF Capital One Financial Corporation PM Tuesday
UAL United Continental Holdings, Inc. PM Tuesday
GD General Dynamics Corporation AM Wednesday
SWK Stanley Black & Decker, Inc. AM Wednesday
RCL Royal Caribbean Cruises Ltd. AM Wednesday
GE General Electric Company AM Wednesday
CMCSA Comcast Corporation AM Wednesday
ABT Abbott Laboratories AM Wednesday
UTX United Technologies Corporation AM Wednesday
LVS Las Vegas Sands Corp. PM Wednesday
LRCX Lam Research Corporation PM Wednesday
CCI Crown Castle International Corp. (REIT) PM Wednesday
F Ford Motor Company PM Wednesday
WHR Whirlpool Corporation PM Wednesday
XLNX Xilinx, Inc. PM Wednesday
URI United Rentals, Inc. PM Wednesday
MKC McCormick & Company, Incorporated AM Thursday
NOC Northrop Grumman Corporation AM Thursday
RTN Raytheon Company AM Thursday
LUV Southwest Airlines Co. AM Thursday
AAL American Airlines Group Inc. AM Thursday
CELG Celgene Corporation AM Thursday
UNP Union Pacific Corporation AM Thursday
CAT Caterpillar Inc. AM Thursday
MMM 3M Company AM Thursday
BIIB Biogen Inc. AM Thursday
INTC Intel Corporation PM Thursday
SBUX Starbucks Corporation PM Thursday
WDC Western Digital Corporation PM Thursday
KLAC KLA-Tencor Corporation PM Thursday
MXIM Maxim Integrated Products, Inc. PM Thursday
CL Colgate-Palmolive Company AM Friday
ABBV AbbVie Inc. AM Friday
HON Honeywell International Inc. AM Friday


New York Strategy Swing

# Date Stock Long\


Statues Data Close Profit\


1 3.11.2017 AKAM Long Close 8.11.2017 +1.37%
2 10.11.2017 JUNO Long Close 14.11.2017 +1.26%
3 16.11.2017 FLR Long Close 25.11.2017 +2.16%
4 6.12.2017 SPLK Long Close 8.12.2017 +1.51%
5 11.12.2017 NKTR Long Close 2.1.2017 +4.57%
6 18.12.2017 SYY Long Close 19.12.2017 +0.14%
7 3.1.2018 VOYA Long Close 8.1.2017 +0.67%
8 4.1.2018 TER Long Close 10.1.2017 +0.45%
9 9.1.2018 SCG Long Close 10.1.2017 -3.35%
10 11.1.2018 CREE Long Close 16.1.2018 +1.84%
11 11.1.2018 CF Long Close 16.1.2018 +1.66%