By K. Matras ...... reporter de hoy ...

[H. LEIN]

Big Gains For Financials, Transportation And Retail



Interesting day in the markets yesterday. The large-cap Dow and the small-cap Russell 2000 were both up (0.44% and 0.38% respectively). But the broader S&P was essentially flat (-0.04%), while the tech heavy Nasdaq was down (-1.27%). It was a weirdly uneven day.

 And while tech got slammed, we saw big gains in financials, transportation and retail.

 But make no mistake, the market is still transfixed on what the Senate will do regarding tax cuts. As mentioned yesterday, they could vote on it as early as today or push it off until early next week. The exact time will likely depend on when the leadership believes they have the votes.

 By the way, there's one more government controlled event that the market will be watching closely, and that's the looming budget deadline on December 8th. In spite of being unabashedly bullish, I have to say, I'm a tad concerned. There's been a fair amount of comments made regarding a potential shutdown if they can't come to an agreement. I don't think anybody wants that to happen. But there's almost no compromising in Washington nowadays. Hopefully, both parties can come together and not ruin the end of the year for everyone. Fingers crossed.

 But if there was a temporary shutdown, I believe that any pullback would be just as transitory, and actually present a fantastic buying opportunity. But I'd prefer not to have to deal with any fallout if the government can't get it together in time.

 Nevertheless, I remain bullish. And a vote on tax cuts will come before a vote on the budget.

 In other news, yesterday's MBA Mortgage Applications were off -3.1%. Purchases led the way with a 2% increase, but refi's decreased by -8.0%, dragging the composite index down with it.

 The Pending Home Sales report underscored the strength in purchases with a 3.5% gain vs. last month's -0.4% and views for 'just' 1.0%.

 Corporate Profits jumped to a 10.0% y/y rate of change vs. last month's pace of 7.4%.

 And the second estimate for Q3 '17 GDP rose from 3.0% to 3.3%. That was in line with expectations. But it was still great to see. Prior to this year, the annual GDP rate during this bull market has averaged less than 1.5%. Yet this year we're at 3% and above - twice that of the rate that preceded it. Very impressive.

 Many of you know I'm expecting the S&P to double again within the next 5 years. Sounds like a tall order, but quite doable given the GDP is doing just that. So for anyone thinking the market is close to running out of steam, I caution you to think again. In fact, I urge you to read our latest commentary titled...

[H. LEIN]

Importante lo q. pronuncie la cámara del senado respecto respecto a la rebaja de impuestos ....  a quien dice q. se está descontando el ok., y un NO sería muy negativo .... en cambio estoy leyendo ahora a otros analistas q. aseguran q. el ok está a falta de un solo voto para salir adelante y en el corto plazo eso sería un 30 % de subida en index .....  ...   Veo q. hay un 95 % con chaqueta alcista o muy alcista .... demasiado consenso, para cosa buena !! ... jejejeje

[kostarof]

gracias lein

Día interesante en los mercados ayer. El Dow de gran capitalización y el Russell 2000 de pequeña capitalización subieron (0,44% y 0,38%, respectivamente). Pero el S & P más amplio se mantuvo esencialmente plano (-0,04%), mientras que el Nasdaq, que tenía un fuerte peso tecnológico, cayó (-1,27%). Fue un día extrañamente desigual.

Y mientras que la tecnología fue criticada, vimos grandes ganancias en finanzas, transporte y venta minorista.

Pero no se equivoquen, el mercado todavía está paralizado en lo que hará el Senado con respecto a los recortes de impuestos. Como se mencionó ayer, podrían votarlo hoy o adelantarlo hasta principios de la próxima semana. El tiempo exacto probablemente dependerá de cuándo el liderazgo cree que tiene los votos.

Por cierto, hay otro evento controlado por el gobierno que el mercado observará de cerca, y esa es la fecha límite presupuestaria que se avecina el 8 de diciembre. A pesar de ser descaradamente optimista, tengo que decir que estoy un poco preocupado. Ha habido una buena cantidad de comentarios sobre un posible cierre si no pueden llegar a un acuerdo. No creo que nadie quiera que eso suceda. Pero casi no hay compromiso en Washington hoy en día. Con suerte, ambas partes pueden unirse y no arruinar el final del año para todos. Dedos cruzados.

Pero si hubo un cierre temporal, creo que cualquier retroceso sería tan transitorio, y en realidad presentaría una fantástica oportunidad de compra. Pero preferiría no tener que lidiar con ninguna consecuencia si el gobierno no puede lograrlo a tiempo.

Sin embargo, sigo siendo alcista. Y un voto sobre los recortes de impuestos llegará antes de una votación sobre el presupuesto.

En otras noticias, las solicitudes de hipoteca de MBA de ayer fueron de -3.1%. Las compras lideraron el camino con un aumento del 2%, pero las refi disminuyeron un -8.0%, arrastrando consigo al índice compuesto.

El informe Pending Home Sales destacó la fortaleza de las compras con una ganancia del 3.5% frente al -0.4% del mes pasado y las visualizaciones de 'solo' 1.0%.

Las ganancias corporativas aumentaron a una tasa de cambio de 10.0% a / a contra el ritmo del 7.4% del mes pasado.

Y la segunda estimación del PIB del tercer trimestre de 17 aumentó del 3,0% al 3,3%. Eso estuvo en línea con las expectativas. Pero aún así fue genial de ver. Antes de este año, la tasa anual del PIB durante este mercado alcista ha promediado menos del 1.5%. Sin embargo, este año tenemos un 3% o más, el doble que la tasa que lo precedió. Muy impresionante.

Muchos de ustedes saben que estoy esperando que el S & P se duplique nuevamente en los próximos 5 años. Suena como un pedido difícil, pero bastante factible dado que el PIB está haciendo justamente eso. Entonces, para cualquiera que piense que el mercado está a punto de quedarse sin energía, le advierto que piense de nuevo. De hecho, le pido que lea nuestro último comentario titulado ...

[H. LEIN]

Senate Passes Tax Cuts, Reconciliation Between Both Chambers Is Next  ....

Volatile day in the markets on Friday, but they finished largely where they started, albeit modestly lower. But for the week, the Dow, the S&P, and the Russell 2000 all posted impressive weekly gains.

 Early in the day, it became clear that the Senate had the votes to pass the tax cuts, and the markets were up on the anticipation. Then word that Gen. Flynn had cut a deal with the Mueller investigation sent stocks plummeting. But when more details surfaced, stocks quickly came off of their lows and spent the rest of the day trying to get back to even.

 Who knows where the Flynn saga goes from here. But the market, at least for now, has compartmentalized this news, and continues to focus (and rightly so), on the economic gains, excellent corporate profits, and the upcoming tax cuts.

 In other news, Motor Vehicle Sales slipped a bit from 18.1 million units (annualized) to 17.5 million. But analysts were quick to point out that, except for the strong hurricane related gains in September and October as replacement vehicles spiked demand, November's tally was the best since February.

 The PMI Manufacturing Index also slipped a bit from 54.5 to 53.9. But again, analysts noted the strong internals such as new orders and the fourth month in a row of increasing backlogs as further evidence of a healthy economy.

 This was underscored by the ISM Manufacturing Index which came in at 58.2, just under last month's 58.7. Analysts cited big gains in new orders, increases in backlogs, and strong gains in production. As one put it, "the composite headline...doesn't do justice to the strength of the report".

 And Construction Spending was up a sharp 1.4% from last month's 0.3%, with non-residential spending leading the way.

 All in all, more positive news for the economy and the market.

 And as for the tax cuts, only thing left is for the House and the Senate to agree to one bill that they can both get behind and send to the President to sign by year's end.

 That keeps the market on track for a strong December.

[kostarof]

pues que siga fuerte, gracias Lein

[H. LEIN]

Odds Are High For More Gains In December

The markets finished mixed yesterday, but not before the Dow, the S&P, and the Russell 2000 index made new all-time highs before profit taking pared those gains.

 After the Senate passed their tax cut bill late Friday night/Saturday morning, this was the first chance traders had to react to the news, and they did so by sending stocks sharply higher in the morning.

 But both chambers still have to reconcile their differing bills into one for the President to sign. Most are optimistic that this will get done in short order. But nothing is done in DC until it's done.

 However, traders likely became a bit cautious ahead of Friday's (Dec. 8th) deadline for a spending bill to avoid a government shutdown. Leaders of both parties will meet with the President at the White House on Thursday. But that leaves little room for error. Hopefully, some compromise can be reached. Nobody, whichever side of the aisle you're on, wants to see a shutdown, especially during the holidays.

 In other news, yesterday's Factory Orders report beat expectations with a -0.1% print vs. views for -0.4%. Analysts were quick to point out that gains were seen in non-durable goods, core capital goods, inventories, shipments, and a big gain in vehicle orders. But a large dip in commercial aircraft weighed on the numbers. Although, that's expected to be transitory, following Boeing's massive success at securing new orders at the Dubai Airshow last month.

 Between the tax cut bills going to committee, the spending bill showdown coming on Friday, and the always important Employment Situation report coming out on Friday as well, there could be plenty of fireworks by week's end.

 But I remain optimistic that the market continues on its historic bull run. And the odds are with us seasonally for a strong December. For example, over the last 100 years, the Dow, in December, has increased on average of 1.55%, and closed higher 75% of the time.

 Those sound like great odds.

 See you tomorrow,