Mike’s Morning Brief – May 24, 2017

Mike's Morning Brief

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

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 this morning after the S&P banked its 4th consecutive increase and the index is back near all-time highs at 2400.  The concerns about the Trump campaign’s ties to Russia seem to have dissipated, though the investigation keeps moving forward.  The President is in Italy today, continuing his international trip with a meeting with the Pope at the Vatican.  China got a credit downgrade from Moody’s.  The Fed releases their minutes from their last meeting today.  Investors will be interested to see what they say about its $4.5 Trillion balance sheet.  Canadian and Mexican leaders met to discuss the future of NAFTA, and how they need to work together with the US to modernize the trade agreement.  Europe has improved significantly economically, but stress still exists in the system according to the ECB.  British PM Theresa May sent armed forces throughout the UK after raising the terror level in response to the bombing in Manchester.  The Fiduciary rule is set to go into effect in June.  It will have little impact on us, as we have been fiduciaries for over 40 years, always acting in our clients best interest.  Crude prices are holding $51 ahead of the OPEC meeting this weekend. Gold is higher again while interest rates are flat.
Have a great day.
Mike

 

Mike’s Morning Brief – May 17, 2017

Mike's Morning Brief

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

Mike's Morning Brief

Mike’s Morning Brief – May 17, 2017

 

Mike’s Morning Brief: A fast-break rundown of what’s going on.
Market opens lower as the issues at the White House continue to escalate and the severity of the situation is growing by the minute.  For most of the 7 months since President Trump was elected, the Market has taken his controversial and unconventional behavior in stride.  The focus has been on earnings and economic acceleration.  It feels a little different now, and the controversy with classified intelligence and Russia is catching up to the President.  The Market is likely anticipating the prospects for tax reform are slipping away while the White House scrambles to maintain composure.  Interest rates are lower, as money flows to Bonds for some safety.  Gold has been catching a bid as well.  The Dollar is weaker this morning, and has been for a while.  Oil is slightly higher in early trading with WTI around $49.  Earnings Season is basically over, and was very solid, with the S&P growing earnings over 13% in Q1.  But the focus will naturally turn towards Geopolitics, which will bring more volatile price action to the mix.  So many investors haven’t trusted this rally and are shocked that the Market has gone up as much as it has this year.   There hadn’t been a 1% decline on the S&P in 2 months and only a handful since the election.  That changed today.  Tighten those belt and hang on for the ride.
Mike

 

Mike’s Morning Brief – May 3, 2017

Mike's Morning Brief

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

Mike's Morning Brief -May 3, 2017

“Market opened in the red on this Fed day. Rates won’t hike, but how the FOMC frames the outlook for the US economy will move the Market.”

Mike’s Morning Brief: A fast-break rundown of what’s going on.
Market opened in the red on this Fed day.  Rates won’t hike, but how the FOMC frames the outlook for the US economy will move the Market.  Economic data has been a little mixed of late, showing some signs of sluggishness.  ADP had an inline report for private sector jobs.  The Non-Farm payroll report comes Friday.  Interest rates are ticking down ahead of the Fed statement.  Apple had another solid Qtr, despite missing on revenues.  The stock is slightly down on the news weighing a little on the major indices in early trading.  The French election is gaining momentum again, with a candidate debate today.  The vote is Sunday and will be watched very closely.  The EU issued a bigger bill to the UK for Brexit.  No surprise, the Brits are pushing back.  President Trump sent another head scratching tweet, saying a government shutdown would be good.  The price of Oil remains weak, below $48 now, near the lows on the year.  Gold has been weak as well.
Have a great day.
Mike

 

 

Mike’s Morning Brief – April 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 opened flattish after the 2 best sessions on the year have taken the major indices back to their all-time highs. The NAS punched thru 6K for the first time ever.

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

Market opened flattish after the 2 best sessions on the year have taken the major indices back to their all-time highs.  The NAS punched thru 6K for the first time ever.  The DOW cleared 21K again yesterday.  The Trump administration will roll out its tax plan today, which is something the Market has wanted.  The goal is to simplify the tax code which pretty much everyone but tax professionals desperately want.  Details are few, but it sounds like a repatriation of offshore cash will be included.  Initial talks were for a 15% corporate rate, which will not happen.  But it’s a start to have the conversation.  Earnings continue to pour out, as Twitter finally has something good to say about a Quarter.  Interest rates keep ticking higher while Crude and Gold have been sluggish this week.  The Dollar is stronger in early trading.

 
Have a great day.
 
Mike

 

Mike’s Morning Brief – April 19, 2017

Mike's Morning Brief

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

Mike's Morning Brief

This Market continues its sideways action with a downward bias. It’s been correcting since hitting the new, all-time highs in February.

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

Market opened higher after much of Monday’s gains were erased by Tuesday’s losses.  Importantly, stocks closed well off their lows yesterday.  But we have seen decliners 4 of the last 5 trading days.  This Market continues its sideways action with a downward bias.  It’s been correcting since hitting the new, all-time highs in February.  Corrections can come with time rather than price.  That’s what this feels like, a healthy consolidation before setting up for higher levels into Summer.  That’s still our thesis.  But we are very mindful that things can change.  Geopolitics are a total wild card, but so far have been somewhat manageable.  These are really challenging issues with no easy solutions.  When the facts change, so do we. The French election is looming, and too early to call.  Expectations are for the left leaning, pro-EU candidate to win.  It sounds like the US aircraft carrier Vinson did not make its way to the Korean peninsula after all.  Earnings haven’t brought the positive tone expected quite yet.  IBM is weighing heavily on the DOW with its 20th consecutive Qtly revenue decline.  Morgan Stanley reported a double beat, sending the stock higher.  Interest rates are ticking up again, with the 10-Year Treasury yield back above 2.2%.  Crude is getting lift as well.  Gold has been strong the last few days, and is taking a breather in early trading.  The Dollar is higher after an extended period of weakness, which is mostly mean reversion from super strength.

Have a great day.
Mike

 

Mike’s Morning Brief – April 12, 2017

Mike's Morning Brief

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

Mike's Morning Brief

Mike’s Morning Brief

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

Market opened in the red again after a pretty wild session yesterday saw early losses largely erased. Global Markets were mixed overnight. Geopolitics and emotion seem to be taking the lead right now, but fundamentals and technicals remain the underlying drivers. Earnings will take the lead again starting tomorrow. Crude is going for 7 straight daily gains. Secretary of State Rex Tillerson is still in Moscow to discuss Syria, Ukraine, and whether the US and Russia can find common ground. At the same time, a U.S. carrier group moves on waters around North Korea. The G7 decided against Russian sanctions, something the US was pushing for. Money keeps flowing into Bonds, with the 10-Year Treasury yield below 2.3%. Gold is higher too. Tax reform is looking less likely in 2017.

Have a great day,

Mike

Mike’s Morning Brief – March 29, 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.

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

Market opened flattish on this historic day.  The United Kingdom has officially triggered the formal process of leaving the European Union by invoking Article 50 of the Lisbon Treaty.  A 2-year window for negotiations has begun.  This is no surprise.  The road ahead will certainly bumpy.  It’s never happened before.  Global stocks caught a bid after our Markets accelerated higher, putting an end to the 8-day losing streak.  British stocks are at all-time highs.  Chicago Fed President Charlie Evans said he sees inflationary pressures supporting higher rates.  But he also said he sees little growth above 1.75% for GDP.  That number is pretty low compared to consensus.  Energy came to life yesterday after being grossly oversold.  We still believe it goes higher led by WTI, which is back above $48.  It’s interest that rates are holding firm with the 10-Year Treasury below 2.4%.  The Dollar is catching a bid as is Gold in early trading.  Expect the volatile price action continue, with an upward bias this Spring.

Have a great day.

Mike

 

 

Mike’s Morning Brief – March 15, 2017

Mike's Morning Brief

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

Mike's Morning Brief - March 15, 2017

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 on this March Fed day.  Beware the ides of March.  A rate hike is expected and investors will follow closely, every word in the statement and every word in the press conference.  The US economy has been accelerating.  Interest rates are finally going higher for the right reasons. Oil is catching a bid after a few ugly sessions.  Energy’s underperformance has started to infect the broader Market.  It’s catching a bid this morning, which is helping.  Donald Trump’s tax returns became an issue again, as his 2005 return was leaked and shown on MSNBC last night.  It showed that he made money and paid taxes and donated to charity.  Some believe he was the one who leaked it.   Dutch voters head to the voting booth today.  Elections continue to be the theme, and right wing protectionism is gaining momentum.  China publicly said they don’t want a trade war with the US.  Secretary of State Rex Tillerson will be in China on Friday.  The G20 will have plenty to talk about this week at their first session of the year.

Have a great day.

Mike

 

Mike’s Morning Brief – March 8, 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 with a solid ADP report for February, suggesting Friday will bring another solid jobs report.

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

Market opened in the green with a solid ADP report for February, suggesting Friday will bring another solid jobs report.  Interest rates are jumping with the Fed meeting now a virtual lock for a rate hike next week.  The 10-Year Treasury yield is pushing 2.6% for the first time this year.  Global Markets were mixed overnight with gains in Europe and declines in Asia.  China reported some disappointing economic data, but it really isn’t that much of a surprise.  China’s multi-year transition from exports to consumption continues to have bumps.  Appaloosa’s David Tepper is grabbing headlines this morning with his repeated Bullish Outlook for the US and European Markets.  He sees global growth accelerating.  It’s a theme we’ve been saying for a while and more importantly, acting on.  Most investors have been frozen on the defensive.  That said, the DOW and S&P closed lower yesterday, marking its first 2-day decliner in 2 months.  And not insignificant, there were more 52-week lows than 52-week highs on the NYSE.  The last time the NYSE had more new lows than new highs while the SPX less than 1% from new highs was July of 2015. Anyone remember Aug 2015?

Mike

Mike’s Morning Brief – March 1, 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 is soaring to start the month of March on the back of what has to be considered a much better than expected speech from our new President and more solid economic data around the globe.

Mike’s Morning Brief: A fast-break rundown of what’s going on.
 
Market is soaring to start the month of March on the back of what has to be considered a much better than expected speech from our new President and more solid economic data around the globe. The record tying 12 consecutive new highs came to an end yesterday. A new streak has begun. DOW hit 21K this morning, a level never before reached. It hit 20K just 24 trading days ago. The only thing that has changed really is perhaps psychology. If we can actually see some bipartisan action, there’s no stopping this Market. But realistically, there was little detail in Trump’s address to Congress last night and the likelihood of Republicans and Democrats working together is still very small. But the tone felt much better.
 
Donald Trump seemed very Presidential last night. Perhaps that is what mattered most. Interest rates are jumping off increasing expectations of a rate hike this month. The Dollar is stronger too. Crude Oil is higher while Gold is lower. There is a great deal of movement under the surface. It all suggests growth.
 
Have a great day.
Mike

 

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