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.

IndexLastDaily changeR2R1PPS1S2
DJX20,812(-0.12%)Down     
SPX2,364(-0.26%)Down237.41236.94236.48236.01235.55
Nasdaq5,825(-0.62%)Down130.83130.43130.04129.64129.25

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

 

DAYTIME (EST)EventForecastImpact
Monday8:30Durable Orders1.8%Medium
Monday10:00Pending Home Sales0.9%Medium
Tuesday8:30GDP – Second Estimate2.1%High
Tuesday8:30Wholesale InventoriesMedium
Tuesday9:45Chicago PMI53.0%Medium
Tuesday10:00Consumer Confidence111.5High
Wednesday8:30Personal Income0.4%Medium
Wednesday8:30Personal Spending0.3%Medium
Wednesday10:00Construction Spending0.6%Medium
Wednesday10:00ISM Index56.1High
Wednesday10:30Crude InventoriesLow
Wednesday14:00Auto SalesLow
Wednesday14:00Fed’s Beige Book High
Thursday8:30Initial Claims244KHigh
Friday10:00ISM Services56.5%Medium

  

Earning Calendar

 

SymbolCompanyAM/PMDay
AMTAmerican Tower CorporationAMMonday
PCLNThe Priceline Group Inc.PMMonday
OKSONEOK Partners, L.P.PMMonday
WDAYWorkday, Inc.PMMonday
OKEONEOK, Inc.PMMonday
PRGOPerrigo Company plcPMMonday
SBACSBA Communications CorporationPMMonday
CNPCenterPoint Energy, Inc.AMTuesday
LNGCheniere Energy, Inc.AMTuesday
BMOBank of MontrealAMTuesday
TGTTarget CorporationAMTuesday
SRESempra EnergyAMTuesday
PANWPalo Alto Networks, Inc.PMTuesday
ROSTRoss Stores, Inc.PMTuesday
CRMsalesforce.com, inc.PMTuesday
BBYBest Buy Co., Inc.AMWednesday
DLTRDollar Tree, Inc.AMWednesday
LOWLowe’s Companies, Inc.AMWednesday
AVGOBroadcom LimitedPMWednesday
MNSTMonster Beverage CorporationPMWednesday
JDJD.com, Inc.AMThursday
KRThe Kroger Co.AMThursday
CNQCanadian Natural Resources LimitedAMThursday
COSTCostco Wholesale CorporationPMThursday
ADSKAutodesk, Inc.PMThursday

 1.3.2017

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
HAIN35.75 WUBASIG
NTAP42.18 WTWAMTD
SLCA 50.17ADMDDD
   XRAYGME
   HTZDG

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

11.2.2017AKAOLongClose16.2.2017+11.29%
22.2.2017DATALongClose6.2.2017+13.09%
37.2.2017GNCShortClose9.2.2017+3.26%
49.2.2017PGLongClose13.2.2017-0.63%
59.2.2017ATILongClose14.2.2017+2.42%
613.2.2017STXLongClose16.2.2017+1.26%
714.2.2017CXWLongClose23.2.2017+4.53%
815.2.2017ZENLongClose23.2.2017+1.60%
921.2.2017AALongClose23.2.2017-1.17%
1022.2.2017SCORShortClose24.2.2017+0.78%
1123.2.2017NTAPLongOpen +1.88%
1227.2.2017DATALongOpen -1.12%
13      
14      
15      
16      

 Today’s Picks – Swing “New-York Strategy

No.1 –    VOYA

Company NameVoya Financial
Entry Point41.34
Stop Area40.65
1st Target41.80
Swing Target42.96
Avg. Volume1.68M
SectorFinancial | Asset Management
Earning Date
Risk RateNormal
Risk\Reward Ratio2.35:1

 

No.2 – LVS

Company NameLas Vegas Sands
Entry Point52.80
Stop Area53.45
1st Target52.40
Swing Target51.35
Avg. Volume4.73M
SectorServices | Resorts & Casinos
Earning Date
Risk RateNormal
Risk\Reward Ratio2.23:1