Picks of the Day May 23,2017

Smooth Trip Gives Market Smooth Ride

Stocks on Wall Street rose in yesterday’s drama-free trading, the calm being well received after the strong volatility last week. The rat-a-tat of local political headlines has slowed with Trump continuing his first presidential trip overseas, flying yesterday from Saudi Arabia to Israel. After news came out of a weapons deal between the U.S. and Saudi Arabia amounting to billions of dollars, the weapons industry soared. General Dynamics (GD), Raytheon (RTN), and Lockheed Martin (LMT) all rallied to new highs. At the same time, the rally cooled off over the trading day, the abovementioned stocks rising between 0.6% and 1.6%. The Aerospace & Defense ETF, the XAR, rose 1.11%.

A number of appearances on the part of senior Fed officials didn’t prompt any news of note leading up to the release of the minutes from the central bank’s latest meeting which are expected to be released later this week. Traders also have their sights trained on a prospective extension of the crude production cut in the meeting OPEC will be convening this Thursday.

In Summary for the Day: The Dow Jones tacked on 0.4%, the S&P 500 rising 0.5% and the NASDAQ rallying 0.8%. Gold rose 0.6% on the backdrop of the continued weakness in the U.S. dollar, crude gaining 0.9%.

One of the stocks standing out in yesterday’s trading was Ford (F), which rallied 2.1% on the heels of the resignation of its CEO, Mark Fields, who had voiced frustration about the company’s stagnating stock price and its flagging momentum in electric car production and autonomous driving technologies. Qualcomm (QCOM) jumped 2.8% on the background of a rate hike from J.P. Morgan. Oclaro (OCLR) soared 10.2% on the background of positive coverage from the Jaffray’s brokerage house.

On the negative side, AMD fell 3.3% as investors engaged in profit taking on the heels of the latest rally. Citigroup cast doubt on the latest reports that AMD can reach a graphics licensing deal with Intel. Amgen (AMGN) fell 2.2% after it revealed that new cardiovascular risks were found with its Osteoporosis drug.

Back to OPEC! The oil cartel is expected to meet in two days’ time in Vienna, the consensus pointing to a 9-month extension of the production cut which has already been in effect for 6 months; the cuts were aimed at normalizing prices in light of a global oil gut.

There have been discussions about the possibility of a deeper production cut. The risk for OPEC, of course, is that it will have to relinquish part of the market segment it had won in a tooth and nail price war in 2015, after beating back American oil shale producers. American crude companies have increased their number of operational rigs over the last few months in response to the latest recovery in crude prices, prompted, in turn, by the cartel production cut.

On the S&P 500, 45 stocks rose to new 52-week highs, 3 dipping to new yearly lows; on the NASDAQ, 102 stocks recorded new 52-week highs, 60 falling to new yearly lows.

About 5.9 billion shares changed hands on U.S. exchanges, beneath the 6.9 billion average over the last 20 trading days.

Tuesday: Today’s Economic Diary will include new home sales at 10:00 N.Y. time, and earlier in the day, Markit’s Supply Managers’ service sector PMI at 9:45. Most earnings reports have already been released, but Toll Brothers (TOL) and AutoZone (AZO) will be releasing their financial results before the opening bell.

Trump’s trip to the Middle East and Europe is expected to continue to pique investors’ interests. Until now, the trip has been successful, the president sticking to the written script. That, in its own right, could help renew confidence in Trump if his trip is crowned a success.

The fact that until now Trump hasn’t succeeded in implementing his election agenda to a substantial degree has hurt the dollar, while at the same time propping up the Euro on the background of better forecasts for the continental bloc. The dollar index is off 0.9% since the elections, after having rallied prior by 6% come the month of January. The thick air surrounding the investigation of the Trump’s election campaign’s complicity with Russia needs to clear for the U.S. dollar to take off again.

Tuesday’s Hot Stocks: TTWO, A, TOL, MOMO

IPOs: None

Have a great trading day!

Today’s Picks – Day Trading!

 New York Strategy Swing

Today’s Picks – Swing “New-York Strategy

No.1 –    SNAP