Mike’s Morning Brief – September 20, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opened flattish again this morning ahead of the Fed policy statement and press conference. President Trump addressed the United Nations General Assembly yesterday with a very bold speech. Some people liked it. Some didn’t. He was very critical of North Korea’s leader. He set expectations for military action along the Korean Peninsula. A response is very likely. Hurricane Maria made landfall over Puerto Rico with category 4 winds. It is next expected to hit Florida. A horrific earthquake near Mexico City killed over 200 people. That is the 2nd earthquake in 2 weeks in Mexico. Mother Nature has been active and angry of late. Crude is back above $40. With all of these things going on and a Market that has become rather expensive, you’d think we’d be in the midst of a pretty healthy sell-off, right? Nope. All 3 major indexes are at all-time highs. The DOW made it 8 up days in a row and 16 of the last 21. Like a beach ball under water, this Market just won’t stay down. The VIX can’t stay up. Interest rates are ticking lower in early trading. The yield curve has flattened a bit. We will learn more at 11a.

Have a great morning,

Mike Frazier

Mike’s Morning Brief – August 30, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens flattish after a surprising reversal yesterday which saw the North Korean induced overnight losses completely erased.  We expected to see a raucous August.  It sure has happened.  This Market has held in remarkably well considering all of the issues going on, but we aren’t convinced it will last.  The risks are becoming greater by the day in our estimation.  The latest missile launched from North Korea is quite concerning on so many levels.  It comes at a time when our nation has the appearance of vulnerability to our adversaries.  We aren’t convinced the correction is over.  This feels like new territory in which we operate, and the DOW and S&P are merely 2% off all-time highs.  The tragedy along the Gulf Coast in Texas will take time and require substantial resources in recovery.  While leaders in Washington argue, first responders and fellow Americans rushed to help their neighbors.  That is indeed the American way.  Hopefully, this will instill patriotism and collaboration in Washington to provide ample aid to southeast Texas and keep the government open.  The US is on course to hit the debt ceiling next month, which means it could default in paying its bills and obligations.  There was a government shutdown 4 years ago.  It could happen again. The revised GDP report shows the US economy grew 3% last Qtr.  That’s very solid.  It also means the Fed just might raise rates again before year’s end.  Crude prices continue to slip with refinery outage along the Gulf Coast as Permian supplies have nowhere to go.  Gas prices are at 2 year highs.  Gold spiked early yesterday but reversed course as stocks rallied.  There is a bit of an inverse correlation between equities and the precious metal again, something important to pay attention to.  The President heads to Missouri today with tax-reform on the agenda.  No doubt, the topic of North Korea is trailing.  Keep those belts buckled.

Have a great morning,

Mike Frazier

Mike’s Morning Brief – August 23, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens lower, giving back some of the gains from yesterday, which was the strongest day for stocks in 4 months. The NAS avoided a 4-day slide, something that had not happened this year.   Just 1 day after giving a speech on Afghanistan, which got pretty solid reviews, President Trump became unhinged again last night in Phoenix.  He pretty much confused the conciliatory words that he said about Charlottesville again, trashed the media as usual, he even slammed John McCain (in his home state) and said that a government shutdown might actually happen and the wall will be built. People that love Trump liked it.  Those that don’t, didn’t.  It’s also being reported that Trump and Senate Majority Leader are in the midst of their own Cold War, which raises the questions of whether taxes will actually get treatment. This adds more confusion to the equation because McConnell and House Speaker Paul Ryan have reportedly been busy working closely with Treasury Secretary Steve Mnuchin and the President’s chief economic advisor Gary Cohn on putting together a tax plan that could pass.  It was hopes of tax-reform that triggered yesterday’s rally.  Today it’s being reversed.  The circus continues. Wal-Mart and Google are teaming up to compete with Amazon’s Alexa. Samsung is releasing its new Galaxy 8 phone in NYC, weeks ahead of the next iPhone.  Competition is fierce in the phone business.  Global Markets were mixed overnight, with gains in Asia and losses in Europe.  Both the Dollar and Oil are giving up some of yesterday’s gains too while Gold is catching a bid.  Interest rates are lower with the 10-Year Treasury yield back below 2.2%.  Keep those belts buckled.  It¹s going to be a bumpy ride.

Have a great morning,

Mike Frazier

Mike’s Morning Brief – August 16, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opened in the green as the whipsaw action continues on Wall Street. DOW is back over 22K. Volume has been on the light side, typical for this time of year. Earnings Season is coming to an end, and the results have been quite solid, which should keep a floor under this Market. European GDP grew 2.2%, providing strength for the global economy. NAFTA talks begin Round 1 today. The 1990’s trade agreement got a lot of publicity during the election and the President didn’t like it. Speaking of the President, he had a press conference yesterday that created a firestorm of criticism and the divide in this country has not been this wide in decades. More CEO’s are leaving his council. Geopolitics continue to be a major issue. With North Korea, Russia and Venezuela, many around the world would say the US has become the biggest geopolitical risk. Think about that for a minute. The Fed releases its July meeting minutes today. The US economy is in solid shape. Another rate hike might or might not occur by year’s end. The Market is pricing in just a 47% chance. Interest rates keep ticking up with the 10-Year Treasury yield at 2.27%. Oil prices are higher in early trading, with WTI holding $47 but can’t seem to get thru $50. Gold is lower after a strong move last week. Stocks are going through another grinding period. Last week’s shakeout has yet to be resolved. This is the most bizarre political environment I’ve seen, perhaps ever. We are prepared for more downside price action. Keep those belts buckled. There is more turbulence ahead.

Have a great morning,

Mike Frazier

Mike’s Morning Brief – August 9, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens in the red in the wake of the rising tensions with North Korea.  Sparring words between the rogue nation and the US have the world on alert.  President Trump said the US would respond with “fire and fury” while North Korea said they might target Guam first.  That sent Markets lower with a pretty substantial reversal from gains to losses midday yesterday.  Risk is on the rise.  It’s actually sort of surprising that we aren’t down more this morning, with the DOW down 60 points and the S&P down 8% as I type.  International markets were down 1% overnight.  Money is seeking safety, flowing into Bonds and Gold.  Financials are lower with falling rates.  Oil is catching a bid too.  Disney reported a mixed Qtr but the focus is on their shift away from Netflix.  The stock is lower in early trading.  It’s all about North Korea and Disney today.

Have a great morning,

Mike Frazier

Mike’s Morning Brief – July 26, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens in the green with all 3 major indices hitting fresh, all-time highs. It’s really remarkable how well this overall Market has held in in the face of so many issues and seemingly overbought. Earnings continue to pour in with a solid tone, and the participation has expanded, making it a broad-based rally. Tensions continue to rise along the Korean Peninsula. It’s Fed day, and the the central bank will release its statement from the July meeting at 11a. As always, investors will pay close attention to wording to see if there are any changes to their thinking about the US economy and monetary policy. Interest rates are flat ahead of the announcement. Crude continues to catch a bid with the WTI over $48. Inventories this morning will influence pricing, and expectations are building for another drawdown. The Senate couldn’t get enough votes to repeal and replace Obamacare last night. More votes are coming this week to tweak the bill. There is a lot going on…

Have a great morning,

Mike Frazier

Mike’s Morning Brief – July 19, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens flattish again, with the S&P and NAS at fresh highs and the DOW in spitting distance. Earnings have thus far been solid, but unspectacular. Conviction seems to be lacking with a lot of complacency seemingly built up in investor psyche. Volume has thinned quite a bit. It happens every year. It’s Summer. Morgan Stanley had some nice things to say this morning, which is sending the stock higher in early trading. Deflation is a diminishing risk in Europe, so says the ECB. Trade was a theme at a US-China business leaders summit in Washington. The private sector is collaborating to address crippling trade imbalances across the Pacific. Apple hired a new executive to lead its China business, with plans to turn it around. The theme of the week is earnings. The S&P is expected to earn $31.42 in Q2. That would translate to an 8.1% increase year-over-year. Q1 saw 15% growth, the largest quarterly increase since 2011. Earnings expectations for Energy have come down quite a bit with falling Oil prices. 10 of the 11 S&P sectors are expected to record positive year-over-year earnings growth in Q2, but only 3 are expected to beat the total 8.1% gain. Energy, Tech and Financials are expected to grow faster, while the rest of the sectors are expected to grow slower than the composite. Tech and Financials are the 2 largest sectors in the S&P, which means they have the greatest impact.

Have a great morning,

Mike Frazier

 

Mike’s Morning Brief – June 28, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens in the green after a pretty ugly session for Tech yesterday. The NAS fell nearly 2% yesterday as leadership rotated again. Financials caught a bid, seeing the majority of the flows. We expect more choppy action as the Qtr closes out. The vote on the Senate Health Care Bill got pushed out to after July 4, sending stocks lower, particularly those in the Medical arena. As it stands, the Republicans don’t have the votes. The second stage of the Fed stress test comes today, which should be positive for Financials. The Dollar continues to weaken against the Euro. Crude is stable ahead of the inventory report, which will no doubt have influence on oil prices. Interest rates have jumped the last 2 days, with the 10-Year Treasury yield back above 2.2%.

Have a great morning,

Mike Frazier

 

Mike’s Morning Brief – June 21, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens in the green on the Summer solstice. It’s the longest day of the year. Crude officially fell into Bear Market territory, with a 20% decline on the year. It’s trying to get a lift in early trading. In a major move, the Saudi kingdom has shaken up its leadership, which will have a profound impact on global issues going forward. Relations with Iran is at the top of that list. Global stocks rallied on the move. There was another attempted terror attack in Belgium, but fortunately it was defused before more serious damage was done. The Congressional election widely watched in Georgia went to the Republican candidate, a big win for the GOP and another gut buster for Democrats who are looking towards 2018 for power reversal. This should help the timeline for tax reform and other pro-growth policies from the White House this Fall. Tropical Storm Cindy is the first Hurricane-like storm heading to the Gulf Coast this year. Hurricane season has begun. It could play a role in oil production. The DOW and S&P remain near all-time highs. Expect Summer turbulence to return.

Have a great morning,

Mike Frazier

 

Mike’s Morning Brief – June 14, 2017

Mike's Morning Brief

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Mike’s Morning Brief: A fast-break rundown of what’s going on.

Market opens flattish ahead of the conclusion to the Fed meeting and the subsequent statement and press conference. A 1/4 point hike is expected. There was a shooting at a Congressional baseball practice in Alexandria, hitting Majority Whip Steve Scalise, who was wounded but appears to be stable. Interest rates are falling fairly precipitously, most likely in response to the shooting, but also suggesting the Market doesn’t believe there will be much in the way of rate hikes beyond today. A weaker inflation number for May supports the Fed holding back. Attorney General Jeff Sessions was grilled on Capitol Hill yesterday, as the turmoil around the Russia investigation continues. Tech got a bounce yesterday after significant losses the last 2 trading days. Energy and Financials and Healthcare have picked up, as leadership rotated. Gold is catching a bid in early trading this am, after a couple of weak sessions. Oil is lower as is the Dollar. The DOW and S&P are at new, all-time highs.

Have a great morning,

Mike Frazier

 

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