Chances of March Hike on the Rise!

Yesterday, stocks on Wall Street suffered what’s become a rare selloff, as investors awaited Trump’s first address before the Joint Sessions of Congress that took place yesterday after closing. The scent of fleeing risk wafted through the air after Monday’s rally to new highs, one of the most pronounced and enduring rallies the market has ever seen. The gains were concentrated in defensive sectors, most specifically in utility stocks (XLU). Towards the end of closing yesterday, stocks saw additional pressure, March Fed funds futures prices seeing an uptick after the speeches of three top Fed bankers.

In summary for the day, the Dow Jones shed 0.1% and cut its 12-day winning streak. The S&P 500 fell 0.3%, the Russell 2000 (IWM) toppling 1.5%. Gold (GLD) fell 0.4%, crude recording a similar drop. That notwithstanding – and despite the losses on the last day of the month – February proved itself a very positive month for all 3 large Wall Street indexes, with the S&P 500 recording gains of 3.7%.

One of the stocks standing out was the #2 U.S. retailer, Target (TGT), which fell 12.2% after releasing a weaker than expected earnings report for Q4 2016, likewise releasing weak guidance, the chain blaming the ongoing trend towards online retailers.

And now, back to the Fed! The chances of a March rate hike are now being priced in at 72%. All of this is after the rhetoric from a number of top bankers, Philadelphia Fed’s President Patrick Harker, reiterating what he said on Feb. 15th, i.e. that not only is the economy becoming more robust but that it’s only appropriate to hike rates 0.75% this year. What he had to say was strengthened by the words of San Francisco’s Fed President, John Williams, who said that he expects a March hike to receive “serious consideration” in the coming FOMC meeting, while also noting its necessity to prevent the economy from getting “too hot.” He added that rates are now exceptionally low. Lastly, the president of the Federal Reserve Bank of N.Y., Bill Dudley, said in an interview to CNN that the rationale for additional monetary tightening is becoming more and more persuasive.

Stocks have not yet fully responded to headlines made yesterday by the Fed. In the past, statements the likes of yesterday’s had shaken traders to the core. These days, though, players’ attention is no longer on hanging on to the Fed’s every word but rather Trump’s, especially what he’s got up his sleeve vis a vis cutting regulation, taxes and infrastructure spending.

And with all of that said, far be it from us to forget that the bloated U.S. federal debt is now at $20 trillion, and when considering firms’ moderate earnings growth, a more aggressive rate hike pace from the Fed won’t only put pressure on the administration to widen the federal deficit, but will also call into question current stock valuations.

On the S&P 500, 51 stocks rose to new 52-week highs, 4 dipping to new yearly lows; on the NASDAQ, 106 stocks recorded new 52-week highs, 52 falling to new yearly lows.

About 7.9 billion shares changed hands on U.S. exchanges, pretty much on par with the average over the last 20 trading days.

Wednesday: Today’s economic figures will include the critical Supply Managers’ ISM manufacturing sector index at 10:00 N.Y. time and Markit’s manufacturing index at 9:45. Also on the roster, infrastructure spending will be released at 10:00, with weekly crude inventories coming out at 10:30. The Fed Beige Book will be released at 14:00. Monthly automobile sales figures are expected to be released today as well.

Earnings reports are expected today from Best Buy (BBY), Lowe’s (LOW), Dollar Tree (DLTR), Mylan (MYL), and Crocs (CROX) before opening. After closing, be primed for the numbers of AVGO, PLNT, and SHAK.

Index Last Daily change R2 R1 PP S1 S2
DJX 20,812 (-0.12%) Down          
SPX 2,364 (-0.26%) Down 237.41 236.94 236.48 236.01 235.55
Nasdaq 5,825 (-0.62%) Down 130.83 130.43 130.04 129.64 129.25

By: Shlomo Cooper, Senior Analyst at Tradenet

Wednesday’s Hot Stocks: PANW, CRM, TIME, ETSY, DLTR, BBY, LOW, MYL

IPOs: HLNE

Have a great trading day!

Economic Calendar

 

DAY TIME (EST) Event Forecast Impact
Monday 8:30 Durable Orders 1.8% Medium
Monday 10:00 Pending Home Sales 0.9% Medium
Tuesday 8:30 GDP – Second Estimate 2.1% High
Tuesday 8:30 Wholesale Inventories Medium
Tuesday 9:45 Chicago PMI 53.0% Medium
Tuesday 10:00 Consumer Confidence 111.5 High
Wednesday 8:30 Personal Income 0.4% Medium
Wednesday 8:30 Personal Spending 0.3% Medium
Wednesday 10:00 Construction Spending 0.6% Medium
Wednesday 10:00 ISM Index 56.1 High
Wednesday 10:30 Crude Inventories Low
Wednesday 14:00 Auto Sales Low
Wednesday 14:00 Fed’s Beige Book   High
Thursday 8:30 Initial Claims 244K High
Friday 10:00 ISM Services 56.5% Medium

  

Earning Calendar

 

Symbol Company AM/PM Day
AMT American Tower Corporation AM Monday
PCLN The Priceline Group Inc. PM Monday
OKS ONEOK Partners, L.P. PM Monday
WDAY Workday, Inc. PM Monday
OKE ONEOK, Inc. PM Monday
PRGO Perrigo Company plc PM Monday
SBAC SBA Communications Corporation PM Monday
CNP CenterPoint Energy, Inc. AM Tuesday
LNG Cheniere Energy, Inc. AM Tuesday
BMO Bank of Montreal AM Tuesday
TGT Target Corporation AM Tuesday
SRE Sempra Energy AM Tuesday
PANW Palo Alto Networks, Inc. PM Tuesday
ROST Ross Stores, Inc. PM Tuesday
CRM salesforce.com, inc. PM Tuesday
BBY Best Buy Co., Inc. AM Wednesday
DLTR Dollar Tree, Inc. AM Wednesday
LOW Lowe’s Companies, Inc. AM Wednesday
AVGO Broadcom Limited PM Wednesday
MNST Monster Beverage Corporation PM Wednesday
JD JD.com, Inc. AM Thursday
KR The Kroger Co. AM Thursday
CNQ Canadian Natural Resources Limited AM Thursday
COST Costco Wholesale Corporation PM Thursday
ADSK Autodesk, Inc. PM Thursday

 1.3.2017

Today’s Picks – Day Trading!

Symbol Breakout Breakdown Momentum Momentum
HAIN 35.75   WUBA SIG
NTAP 42.18   WTW AMTD
SLCA   50.17 ADM DDD
      XRAY GME
      HTZ DG

 

New York Strategy Swing

# Date Stock Long\

Short

Statues Data Close Profit\

Loss

1 1.2.2017 AKAO Long Close 16.2.2017 +11.29%
2 2.2.2017 DATA Long Close 6.2.2017 +13.09%
3 7.2.2017 GNC Short Close 9.2.2017 +3.26%
4 9.2.2017 PG Long Close 13.2.2017 -0.63%
5 9.2.2017 ATI Long Close 14.2.2017 +2.42%
6 13.2.2017 STX Long Close 16.2.2017 +1.26%
7 14.2.2017 CXW Long Close 23.2.2017 +4.53%
8 15.2.2017 ZEN Long Close 23.2.2017 +1.60%
9 21.2.2017 AA Long Close 23.2.2017 -1.17%
10 22.2.2017 SCOR Short Close 24.2.2017 +0.78%
11 23.2.2017 NTAP Long Open   +1.88%
12 27.2.2017 DATA Long Open   -1.12%
13            
14            
15            
16            

 Today’s Picks – Swing “New-York Strategy

No.1 –    VOYA

Company Name Voya Financial
Entry Point 41.34
Stop Area 40.65
1st Target 41.80
Swing Target 42.96
Avg. Volume 1.68M
Sector Financial | Asset Management
Earning Date
Risk Rate Normal
Risk\Reward Ratio 2.35:1

 

No.2 – LVS

Company Name Las Vegas Sands
Entry Point 52.80
Stop Area 53.45
1st Target 52.40
Swing Target 51.35
Avg. Volume 4.73M
Sector Services | Resorts & Casinos
Earning Date
Risk Rate Normal
Risk\Reward Ratio 2.23:1