MARKET-ALERT – Rumblings Up, Down, and Around Wall Street – Issue #413 dated December 11, 2016 – with Ray Dirks of RAYDIRKS Research and his team of securities analysts and money managers – along with the internationally-followed Web Sites www.CorporateProfile.com and www.CPreports.com, where Fashion meets Finance, and where Stocks meet Blonds. Well…well…well…’Twas a great week for common stocks in the United States last week – as the major indexes all moved up by an average of 3%. As the year 2016 comes to a close in a couple of weeks, we at Rumblings are pleased to report to our readers/investors that we had a terrific year with Rumblings’ Favorite Stocks for 2016, helped by the fact that we were bullish on stocks throughout the year. And in this issue Rumblings will list the first 10 stocks that comprise our list of favorites for 2017.
We’ll present this list to our readers/investors at the end of this issue, just as we gave you in our last issue the list of Barron’s 10 Favorite Stocks for 2017.
But first, let’s quote from tomorrow’s “The Trader” column in Barron’s, The Dow Jones Business and Financial Weekly, where the headline reads : “Three Major Indexes Hit All-Time Highs”.
The column starts off : “For the market last week, it was time for wallflowers to finally join the party.
It wasn’t simply that all three major indexes rallied to new all-time highs, but that the tenor of the rally appeared to have changed, as well. Sure, the Dow Jones Industrial Average gained 586 points, or 3.1%, to 19,757, leaving the blue-chip benchmark just 243 points away from 20,000. The Standard & Poor’s 500 index rose 3.1% to 2,260, and the Nasdaq Composite, which had been trailing for so long, climbed 3.0% to 5,445.
Yet for the first time since Donald J. Trump’s victory in the 2016 election, the split between apparent winners and losers under his presidency began to narrow. Yes, the financial sector continued to top the S&P 500 after gaining 4.8% last week, but technology, which has been bringing up the rear in recent weeks, was a close second after rising 4.2%. And even health care, which tumbled as much as 2.2% on Wednesday after Trump criticized drug pricing, managed to finish the week in positive territory.
“Instead of health care dragging the market down, the market pulled health care along for the ride,” says Instinet’s Frank Cappelleri.
What’s behind the sudden shift? A big heaping dose of confidence. On Friday, the University of Michigan’s preliminary consumer confidence index for December rose to 98, the highest level since 2004. And in a report released last week, Bank of America Merrill Lynch economist Michelle Meyer, after perusing the available anecdotal evidence from company earnings calls and other sources, noted that “there is more optimism about the economy following the election.”
If Trump’s tax cuts and spending plans become reality, that could create a virtuous cycle where “the gain in animal spirits could amplify the boost to the economy from fiscal stimulus,” Meyer wrote.
And what a boost it could be. James Paulsen, chief investment strategist at Wells Fargo Capital Management, points to what he calls “confidence spending,” outlays that require conviction about the future, including durable consumer goods, housing, and business investment. Despite the long recovery since the financial crisis, confidence spending as a percentage of nominal gross domestic product remains in the bottom 20% of its history, Paulsen says. And the low level of activity in those components of GDP could see a big boost if consumers and companies finally open the purse strings. “So far, this has been a recovery without animal spirits,” Paulsen says. “If that happens, there’s room for upside.”
Well…Rumblings says that the party is already on for common stocks in the United States and should continue throughout 2017. As promised earlier in this issue, we are listing Rumblings’ 10 Favorite Stocks for 2017, and here they are :
- Fusion (FSNN)
- Apple, Inc. (AAPL)
- Aflac (AFL)
- Hartford Financial Services (HIG)
- Avis Budget Group) (CAR)
- Hertz International Global Holdings (HTZ)
- Oramed Pharmaceuticals (ORMP)
- Biotricity (BTCY)
- Bionik Laboratories (BNKL)
- Pluristem Therapeutics (PSTI)
Rumblings suggests that readers/investors do their due diligence, consult with their investment advisers, and then purchase shares in one or more of the companies listed above.
Rumblings also suggests that readers/investors go to Yahoo Finance on the Internet to review recent developments on the companies. You are also encouraged to review previous issues of Rumblings on our Web Sites – www.CorporateProfile.com and www.CPreports.com , as we have discussed all 10 of these companies within the last few weeks.
And finally, we suggest that readers/investors place no more than 1% of the funds they devote to common stocks in any one security. It’s best to diversify…!
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