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.

Index Last Daily change
DJX 22,284 (0.05%) Down
SPX 2,497 0.01% Up
Nasdaq 6,380 0.15% Up

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

IPOs: RYB

Have a great trading day!

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Tuesday 9:00 S&P Case-Shiller  0.4 % Medium
Tuesday 10:00 New Home Sales 583 K

 

Medium
Tuesday 10:00 Consumer Confidence 120.2 High
Tuesday 11:50 Janet Yellen Speaks “Prospects for Growth: Reassessing the Fundamentals” Medium
Wednesday 8:30 Durable Goods Orders 1.5 % Low
Wednesday 10:00 Pending Home Sales Index -0.1 % Medium
Thursday 10:30 Oil Inventories Low
Thursday 8:30 GDP 3.1 % Medium
Thursday 8:30 Jobless Claims 270 K Medium
Friday 8:30 Personal Income and Outlays 0.3 % Medium
Friday 9:45 Chicago PMI 58.6 Medium
Friday 10:00 Consumer Sentiment 95.3 High

 

Earning Calendar

 

Symbol Company AM/PM Day
CCL Carnival Corporation AM Monday
THO Thor Industries, Inc. PM Monday
DRI Darden Restaurants, Inc. AM Tuesday
MU Micron Technology, Inc. PM Tuesday
NKE NIKE, Inc. PM Tuesday
WOR Worthington Industries, Inc. AM Wednesday
ALR Alere Inc. AM Wednesday
CAG Conagra Brands, Inc. AM Thursday
MKC McCormick & Company, Incorporated AM Thursday
CMC Commercial Metals Company AM Thursday
AKRX Akorn, Inc. AM Thursday
ACN Accenture plc AM Thursday
 

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
SM 18.82 SM PTCT
TSCO 63.38 YY TWLO
DG 79.70 VERI UNIT
    W
    RH
    RGEN

  

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 2.8.2017 AKAM Short Close 3.8.2017 -1.12%
2 3.8.2017 NKE Long Close 8.8.2017 +0.02%
3 4.8.2017 SBUX Short Close 16.8.2017 +2.40%
4 8.8.2017 NTAP Long Close 9.8.2017 -1.17%
5 22.8.2017 ATHM Long Close 23.8.2017 +0.16%
6 23.8.2017 AAP Short Close 26.8.2017 +0.98%
7 28.8.2017 CREE Short Close 30.8.2017 -0.86%
8 30.8.2017 TRIP Long Close 11.9.2017 +3.88%
9 1.9.2017 VNTV Long Close 14.9.2017 +1.35%
10 12.9.2017 CPB Short Close 15.9.2017 -1.10%
11 18.9.2017 INSM Long Close 22.9.2017 +1.92%
12 25.9.2017 GPS Long Open   +2.17%
13  
14
15
16  
17
18            

 

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

No.1 –   SQM

Company Name Sociedad Quimica y Minera de Chile S.A.
Entry Point 54.24
Stop Area 51.45
1st Target 55.40
Swing Target 63.80
Avg. Volume 1.07M
Sector Basic Materials | Chemicals – Major Diversified
Earning Date
Risk Rate High
Risk\Reward Ratio 3.43:1

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