Morning Market Thoughts
Good morning. We are set for a very strong open, with the S&P 500, the Dow-30, and the Nasdaq 100 all set to open at their all time highs. President Trump addressed a joint session of Congress with a speech that was, well, presidential. Some of the high points that are relevant to the markets were mostly nothing new, though it is refreshing to see a politician who actually insists on keeping his promises. I think the speech sustained optimism in the “Trump Trade” because a more measured tone increases the chances that he’ll actually get some stuff done. He fleshed out a few more details on what he is looking for with respect to changes in the health care system. He also reiterated his promise to give the middle class a “massive tax cut,” to require the elimination of two regulations for every new regulation enacted. He renewed his call for an infrastructure spending program. He touched on various other big issues, but they don’t really relate to stocks…so why stir things up by mentioning them.There are indications that inflation might actually exist, which augments corporate earnings. New York Fed President William Dudley made some hawkish comments earlier today, and it’s looking like the Fed is actually going to raise the fed funds rate this month. This paves the way for additional hikes during the year. With interest rates set to go higher, the banking stocks are on a tear this morning, with Bank of America (BAC) up nearly 2.5% in early trading.
All in all, it’s probably going to be a good day for stocks. If you’ve been waiting for a great buying opportunity to get into the market, you are no doubt frustrated. Welcome to Trump World. The party rages on, but the front door is locked.
Don’t forget about the live training session later today — noon ET and 9 am PT. We’ll take an in-depth look at the market, take a look at some of our focus stocks that have been doing very well, and also discuss YOUR stocks. So be there on time, and bring your questions!
See you then.
–Dan
Market Update