“No Bulls Allowed”
Is Investor’s Honeymoon with Trump Over?
Yesterday, the large indexes on Wall Street recorded their largest daily losses this year, investors reminded that Trump’s immigration ban could be a forbearer of other executive policies adverse to the market. The presidential order signed by Trump on Friday forbids the entry of immigrants from 7 Islamic countries, including legal residents of America and Green Card holders. Over the course of this past weekend, thousands of people protested in major U.S. cities and airports, voicing disgust and contempt for the presidential order.
U.S. stocks had recorded a series of historic highs after the election of Donald Trump in November, encouraged by his promises to cut taxes and simplify regulation. It seems that investors had blindsided themselves, seeing only the market-friendly policies Trump had discussed over the course of his election campaign, with the immigration ban now serving as a reminder of the steps Trump could take that would in part undermine the economy.
Technology stocks (XLK) led the losses on the S&P 500 yesterday, the sector being one of the ones clearly hurt by the immigration restrictions, as the ban places hurdles before tech companies desirous of recruiting overseas talent.
In summary for the day, the Dow Jones fell 0.61% and closed beneath the 20,000 point level which it had scaled past for the first time ever last Wednesday. The Dow closed at 19,971 points yesterday. The S&P 500 shed 0.61%, the NASDAQ dropping 0.83% on the day. The Russell 2000, which is made up of the small cap U.S. stocks, recorded a 1.3% decline yesterday, relinquishing all of January’s gains.
Stocks fell yesterday despite the acceleration reported in U.S. consumer spending and the improvement seen in the December ’16 figure for pending home sales. These two figures pointed to local demand that could push up economic growth with the new year now afoot.
One of the stocks standing out in yesterday’s trading was American Airlines (AAL) which fell 4.4%, alongside United Continental which fell 3.6%. Some of the losses were attributed to the new travel limitations imposed on some Middle Eastern countries. The concern is that Trump’s ban on entry to the U.S. could be expanded to other countries or that stricter limitations could be placed on U.S. travel. Delta Airlines (DAL), which suffered a dire computer outage was compelled to cancel about 280 flights between Sunday and Monday. DAL ended sharply off by 4.1%.
On the S&P 500, 5 stocks rose to new 52-week highs, 5 also dipping to new yearly lows; on the NASDAQ, 49 stocks recorded new 52-week highs, 42 falling to new yearly lows.
About 6.67 billion shares changed hands on U.S. exchanges, slightly above the 6.65 billion average over the last 20 trading days.
Tuesday: The Federal Reserve will be commencing a 2-day meeting today, though today, earnings reports will probably nudge other economic and global developments out of center stage with crude giant, Exxon Mobil (XOM) reporting before opening, and Apple (AAPL) releasing its numbers after closing – tens of other companies reporting in between.
The reports before opening today will include PFE, MA, UPS, AET, and LLY. After closing, the main reporters will be X, APC, and AFL – and of course, AAPL.
A flood of earnings reports today is likely to retrain investors’ focus back on the market, and more specifically, fundamentals, i.e. what the market should really be looking at. Until now, 66% of the S&P 500 companies reporting have beaten out analysts’ forecasts, quarterly earnings rising 6.8% year over year.
In addition to earnings reports, today will likewise be jam-packed with economic figures. The morning kicks off with the Employment Cost Index at 8:30 N.Y. time, followed by the Case-Shiller housing price index at 9:00, and then the Chicago PMI at 9:45, with the Consumer Confidence Index coming out at 10:00.
The Fed will release its policy announcement tomorrow at 14:00.
After Closing: The Israeli pharmaceutical company, TEVA, tumbled almost 9% in late trading after the Delaware District Court invalidated 4 patents for the company’s flagship drug, Copaxone. Teva has already announced that it will appeal.
Tuesday’s Hot Stocks: TEVA, SANM, AEIS, RMBS, XOM, MA, UPS, LLY, VLO, HOG, ZBH
Have a great trading day!
|Monday||10:00||Pending Home Sales||1.3%||Medium|
|Tuesday||9:00||S&P Case Shiller Home Price Index||5.0%||Medium|
|Wednesday||8:15||ADP Employment Change||165K||High|
|Wednesday||14:00||FOMC Rate Decision||0.625%||High|
|Thursday||8:30||Unit Labor Costs||1.9%||Medium|
|ZBH||Zimmer Biomet Holdings, Inc.||AM||Tuesday|
|VLO||Valero Energy Corporation||AM||Tuesday|
|TMO||Thermo Fisher Scientific Inc.||AM||Tuesday|
|LLY||Eli Lilly and Company||AM||Tuesday|
|UPS||United Parcel Service, Inc.||AM||Tuesday|
|XOM||Exxon Mobil Corporation||AM||Tuesday|
|APC||Anadarko Petroleum Corporation||PM||Tuesday|
|CHRW||C.H. Robinson Worldwide, Inc.||PM||Tuesday|
|OKS||ONEOK Partners, L.P.||PM||Tuesday|
|EA||Electronic Arts Inc.||PM||Tuesday|
|BAX||Baxter International Inc.||AM||Wednesday|
|MPC||Marathon Petroleum Corporation||AM||Wednesday|
|JCI||Johnson Controls International plc||AM||Wednesday|
|ADP||Automatic Data Processing, Inc.||AM||Wednesday|
|MO||Altria Group, Inc.||AM||Wednesday|
|LNC||Lincoln National Corporation||PM||Wednesday|
|ALL||The Allstate Corporation||PM||Wednesday|
|NXPI||NXP Semiconductors N.V.||PM||Wednesday|
|EW||Edwards Lifesciences Corporation||PM||Wednesday|
|IP||International Paper Company||AM||Thursday|
|BSX||Boston Scientific Corporation||AM||Thursday|
|EL||The Estee Lauder Companies Inc.||AM||Thursday|
|CME||CME Group Inc.||AM||Thursday|
|PM||Philip Morris International Inc.||AM||Thursday|
|MRK||Merck & Co., Inc.||AM||Thursday|
|MSI||Motorola Solutions, Inc.||PM||Thursday|
|HSY||The Hershey Company||AM||Friday|
|LYB||LyondellBasell Industries N.V.||AM||Friday|
|CLX||The Clorox Company||AM||Friday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy
No.1 – FAST
|Company Name||Fastenal Company|
|Sector||Services | Industrial Equipment Wholesale|
No.2 – ATI
|Company Name||Allegheny Technologies,|
|Sector||Industrial Goods | Metal Fabrication|