Picks of the Day February 22, 2017

The Guinness Book of World Records

By: Shlomo Cooper, Senior Analyst at Tradenet

Investors were happy to return to the market from their long weekends and be greeted by continued historic highs, appearing now at a breathtaking daily pace. Stocks on Wall Street soared to new, fresh highs on Tuesday, on the background of strong earnings numbers from Walmart (WMT) and Home Depot (HD), as well as continued optimism from the economic agenda of President Trump. WMT recorded the best performance on the Dow Jones, trading up 3% after the world’s #1 retailer reported higher than expected sales figures. HD rose 1.4% after the do-it-yourself chain reported top and bottom line numbers that beat out the consensus, riding the wave of the strong real estate market.

All of the 11 sectors on the S&P 500 traded up, with almost one out of 5 stocks on the index recording a 52-week high. The S&P 500 has climbed 10.6% since the November 8^th elections, a rally sparked by campaign promises for tax reform, slashed regulation and a significant increase in infrastructure spending.

In summary for the day, the S&P 500 recorded gains of 0.6%, the NASDAQ climbing 0.47%. The Dow Jones rose 0.58%. All-in-all, the 3 indexes closed at all-time highs. With its latest gains, the S&P 500 is trading at a 12-month forward PE of 17.8, significantly above the long-term average of 15.

Now, heading into the last leg of the Q4 earnings season, the aggregate earnings of S&P 500 companies are expected to record growth of 7.5%. The earnings season is proving itself to be substantially better than expected – and that’s exactly what investors were looking for. In other words, investors were looking for something that could justify market price levels.

On the S&P 500, 93 stocks rose to new 52-week highs, without a single stock dipping to a new yearly low; on the NASDAQ, 223 stocks recorded new 52-week highs, 26 falling to new yearly lows.

About 6.7 billion shares changed hands on U.S. exchanges, slightly beneath the 6.8 billion average over the last 20 trading days.

Tuesday: The market is vulnerable today to a surprise from the Fed that could very well materialize – despite the fact that the central bank minutes to be released today are already rather out of date. Traders aren’t expecting the market to respond big time to what’s all-in-all old news. The risk factors, though, take on two forms. Firstly, the Fed could come out sounding too market friendly, in contrast with the latest statements made by some Fed bankers. On the flipside, though, the Fed’s likely to sound less compromising than it did in the latest policy statement which came out immediately after the FOMC meeting on February 1^st, when rates were left unchanged.

Earlier in the month, the Fed announcement, coupled by so-so wage figures in January’s employment report, had lowered March rate hike expectations, which had already been low. Expectations have risen a little since then, after Fed Chairwoman, Janet Yellen, took a tougher stance and expressed confidence in the economy in her most recent congressional testimony last week. Yellen stressed that a rate hike in March is on the table and that in effect, every and any meeting could potentially feature a rate hike. Higher than expected inflation and additional figures also bolster the chances of a March hike. With that said, most analysts are still placing their bets on June for the next hike.

The Fed will release the minutes from its latest interest rate meeting today at 14:00 N.Y. time. Other figures on the economic front today will include existing home sales at 10:00.

Other earnings reports before opening today include: DISH, TJX, TOL, SIX, and GRMN. The companies reporting today after closing include, among others, TSLA, HPE, LB, FIT, SUN, and RIG.

Wednesday’s Hot Stocks: TJX, TOL, DISH, SIX, FSLR, TRCO, TXRH, MBLY

IPOs: None

Have a great trading day!  

22.2.2017

Today’s Picks – Day Trading!

New York Strategy Swing

Today’s Picks – Swing “New-York Strategy

 No.1 –  ATI

No.2 – SCOR