Trump’s Next Test: Taxes!

Stocks on Wall Street ended only lightly changed on Tuesday. The news flow was meager, investors focusing on the hypnotic speech of Fed Chairwoman, Janet Yellen. Yellen accentuated the uncertainty surrounding the future of inflation, though did reiterate that the factors placing a damper on rising prices in the economy are only temporary. She also noted that policy makers need to be concerned about rate hikes that are too gradual. Despite her view – which was seen as tough as far as monetary policy goes – it wasn’t enough to rattle stocks and rouse them from the complacency they’ve dug themselves into.

Daily Summary: The Dow Jones shed 0.05%, the S&P 500 rising 0.01%. The NASDAQ ended up 0.15%.

The chances for a December rate hike have now risen to 78% from 40% just a month ago. Investors need to expect a rate hike in December, especially when considering that it’s anybody’s guess who will be manning the position of Fed Chair come 2018. Yellen will presumably want to hike the interest rate at the end of the year; she knows that were someone else to fill her shoes, that person would find it less than opportune to hike rates in the first month on the job.

On the economic front, the Consumer Confidence Index recorded a slight drop in September, while home sales fell to a 8-month low in August due to the effect of hurricanes Harvey and Irma.

One of the stocks that stood out in trading was Darden Restaurants (DRI) which tumbled 6.53%. Darden, which owns a number of well-know restaurant chains including “Olive Garden,” noted that it expects to see its revenues and earnings take a hit because of Hurricane Irma, which proved itself up to twice as devastating as Hurricane Harvey.

The software company, Red Hat (RHT) climbed 4.09% after the Linux distributor reported earnings that came out stronger than expected. RHT likewise raised its full-year forecast.

About 5.81 billion shares changed hands on U.S. exchanges, compared to the 5.96 billion average over the last 20 trading days.

Wednesday: The tax plan formulated by the Trump administration is expected to be unveiled today, something likely to inject stocks with positive momentum on the last few days of the quarter. Good news, of any shape or form that could advance Trump’s agenda will be significant. Further details about the tax plan have not been forthcoming but the tax reform is expected to both substantially lower the corporate tax rate from its current 35% to the lower range of about 20% and enable American companies to repatriate earnings held in tax havens offshore. U.S. citizens are also expected to benefit from a lower personal income tax.

More than anything else, tax reform will be the big test of the Trump administration, a presidency yet to execute a single large election promise. The reform proposal that will be set forth today will need to make it through both the House of Representatives and the Senate before it is put into law, meaning that the path ahead is an arduous one.

The Economic Diary today will feature durable goods orders at 8:30 N.Y. time. Pending home sales will come out at 10:00, and weekly crude inventories will be released at 10:30.

IndexLastDaily change
DJX22,284(0.05%)Down
SPX2,4970.01%Up
Nasdaq6,3800.15%Up

Wednesday’s Hot Stocks: TWTR, NKE, MU, CTAS, WOR, ALR

IPOs: RYB

Have a great trading day!

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Tuesday9:00S&P Case-Shiller 0.4 %Medium
Tuesday10:00New Home Sales583 K

 

Medium
Tuesday10:00Consumer Confidence120.2High
Tuesday11:50Janet Yellen Speaks“Prospects for Growth: Reassessing the Fundamentals”Medium
Wednesday8:30Durable Goods Orders1.5 %Low
Wednesday10:00Pending Home Sales Index-0.1 %Medium
Thursday10:30Oil InventoriesLow
Thursday8:30GDP3.1 %Medium
Thursday8:30Jobless Claims270 KMedium
Friday8:30Personal Income and Outlays0.3 %Medium
Friday9:45Chicago PMI58.6Medium
Friday10:00Consumer Sentiment95.3High

 

Earning Calendar

 

SymbolCompanyAM/PMDay
CCLCarnival CorporationAMMonday
THOThor Industries, Inc.PMMonday
DRIDarden Restaurants, Inc.AMTuesday
MUMicron Technology, Inc.PMTuesday
NKENIKE, Inc.PMTuesday
WORWorthington Industries, Inc.AMWednesday
ALRAlere Inc.AMWednesday
CAGConagra Brands, Inc.AMThursday
MKCMcCormick & Company, IncorporatedAMThursday
CMCCommercial Metals CompanyAMThursday
AKRXAkorn, Inc.AMThursday
ACNAccenture plcAMThursday
 

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
SM18.82SMPTCT
TSCO63.38YYTWLO
DG79.70VERIUNIT
  W
  RH
  RGEN

  

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

12.8.2017AKAMShortClose3.8.2017-1.12%
23.8.2017NKELongClose8.8.2017+0.02%
34.8.2017SBUXShortClose16.8.2017+2.40%
48.8.2017NTAPLongClose9.8.2017-1.17%
522.8.2017ATHMLongClose23.8.2017+0.16%
623.8.2017AAPShortClose26.8.2017+0.98%
728.8.2017CREEShortClose30.8.2017-0.86%
830.8.2017TRIPLongClose11.9.2017+3.88%
91.9.2017VNTVLongClose14.9.2017+1.35%
1012.9.2017CPBShortClose15.9.2017-1.10%
1118.9.2017INSMLongClose22.9.2017+1.92%
1225.9.2017GPSLongOpen +2.17%
13 
14
15
16 
17
18      

 

Today’s Picks – Swing “New-York Strategy”

No.1 –   SQM

Company NameSociedad Quimica y Minera de Chile S.A.
Entry Point54.24
Stop Area51.45
1st Target55.40
Swing Target63.80
Avg. Volume1.07M
SectorBasic Materials | Chemicals – Major Diversified
Earning Date
Risk RateHigh
Risk\Reward Ratio3.43:1

Risk Rates: Normal – Regular size, High –Consider reducing size, Low – Consider increasing size