Chances of a Rate Hike: 99%!

Wall Street rallied higher yesterday, the S&P 500, the Dow Jones and the Russell 2000 all recording historic closing highs, while tech stocks bounced back and investors made the final adjustments in their stock portfolios before today’s interest rate announcement.

The tech sector (XLK) rose 0.9%, recovering from its 2 sharpest days of losses in almost a year. Large tech stocks, the likes of Microsoft (MSFT) and Facebook (FB) pushed the S&P 500 higher. The tech sector has prompted a 9% rally on the S&P 500 year-to-date, the latest declines in the sector igniting speculation that investors were moving funds out of the sector and into other market areas that have lagged behind this year, like financial and energy stocks.

The financial sector (XLF) rose 0.4% on Tuesday, while the energy sector (XLE) jumped 0.7%.

When push came to shove, investors rushed to capitalize on the losses at the end of last week, and stock up on the same securities but at a cheaper price. As of now, the market’s earnings multiplier has only been higher in the years 1929 and 2000. A Bank of America fund manager survey found that the percentage of investors who believe that the stock market is overpriced is at a peak, while those surveyed designate the NASDAQ as being the most overpriced. At the same time, the rebound over the last few days proves that no one wants to be the sucker who gets out too soon and misses out on the next round of gains!

In Summary for the Day: The Dow Jones rose 0.44%, the S&P 500 climbing 0.45% and the NASDAQ shooting up 0.73%. Gold ended unchanged, crude recovering with gains of 0.8%.

Two stocks that stood out in yesterday’s trading were rental car companies, Hertz (HTZ), which soared 8%, and Avis Budget (CAR), which rallied 3.3%; they benefitted from a new report that pointed to higher valuations for used cars in the secondary market. Tesla (TSLA) soared 4.7% after receiving an upgrade from Berenberg.

On the negative side, the restaurant chain, Cheesecake Factory (CAKE) fell 9.9% after releasing a Q2 sales warning.

About 6.4 billion shares changed hands on U.S. exchanges, substantially beneath the 6.8 billion average over the last 20 trading days.

Wednesday: All eyes are now turned to the interest rate announcement that will be released at 14:00 N.Y. time. Future contracts signal that a rate hike today is almost a done deal, chances placed at 99%. Investors, though, will be waiting to see whether the Fed responds to the mixed economic environment, unemployment low at 4.4%, inflation above 2%, while economic growth and retail chain sales have still come out lukewarm.

Traders will also want to see how Fed Chair, Janet Yellen, relates to the large gap vis a vis the market’s rate expectations. As of now, the Fed expects interest to hit 3% by 2019, while the market expects a far lower rate of just 1.75%.

After the release of the PPI yesterday which saw core inflation rise past Fed’s expectations to an annualized pace of 2.1%, presuming that today we get strong consumer inflation and retail chain sales figures it will be hard for Yellen to justify the Fed’s current rate forecast.

Also, before today’s rate hike announcement, investors will focus on consumer inflation figures, i.e. the CPI, which will be released at 8:30 N.Y. time, retail chain numbers likewise coming out at the same time.

IndexLastDaily change
DJX0.44%21,328Up
SPX0.45%2,440Up
Nasdaq0.73%6,220Up

Wednesday’s Hot Stocks:  HRB, ALXN

IPOs: ATNX, CGBD

Have a great trading day!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Tuesday8:30PPIHigh
Wednesday8:30Retail SalesMedium
Wednesday8:30CPIHigh
Wednesday10:00Business InventoriesMedium
Wednesday10:30Crude Oil InventoriesLow
Wednesday14:00FOMC Rate DecisionHigh
Thursday8:30Philadelphia FedMedium
Thursday8:30Export\Import Prices ex-ag.Medium
Thursday8:30Initial ClaimsMedium
Thursday8:30Empire ManufacturingMedium
Thursday9:15Industrial ProductionMedium
Friday8:30Housing StartsMedium
Friday8:30Building PermitsMedium
Friday10:00Mich SentimentHigh

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Earning Calendar

 

SymbolCompanyAM/PMDay
HRBH&R Block, Inc.PMTuesday
JBLJabil Circuit, Inc.PMWednesday
KRThe Kroger Co.AMThursday
FNSRFinisar CorporationPMThursday
ALRAlere Inc.AMFriday

 

 

 


 

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
TSLA376.87OMERMYL
Z45.85DD 
DOW65.42XPO 
DISH66.44RMD 
HCN74.50  
WYNN135.26  
CLDR17.73  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.5.2017AAOILongClose2.5.2017+0.54%
23.5.2017SCSSLongClose9.5.2017-1.71%
34.5.2017CRZOShortClose5.5.2017+0.30%
48.5.2017WTWLongClose16.5.2017+6.09%
515.5.2017AANLongClose16.5.2017-1.70%
616.5.2017CCLLongClose17.5.2017-0.41%
717.5.2017AMAGShortClose24.5.2017+5.38%
817.5.2017AANLongClose24.5.2017-2.59%
919.5.2017TRCOLongClose23.5.2017-1.45%
1019.5.2017GIMOLongClose26.5.2017+2.05%
111.6.2017BF.BLongClose6.6.2017+0.95%
127.6.2017LULULongClose9.6.2017-2.24%
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15
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Today’s Picks – Swing “New-York Strategy

No.1 –    SBUX

Company NameStarbucks
Entry Point61.26
Stop Area60.48
1st Target61.90
Swing Target64.87
Avg. Volume8.58M
SectorServices | Specialty Eateries
Earning Date
Risk RateNormal
Risk\Reward Ratio4.63:1

No.2 – SIG

Company NameSignet Jewelers Limited
Entry Point58.88
Stop Area61.15
1st Target57.55
Swing Target46.09
Avg. Volume1.70M
SectorServices | Jewelry Stores
Earning Date
Risk RateHigh
Risk\Reward Ratio5.63:1