MARKET-ALERT – Rumblings Up, Down, and Around Wall Street – Issue #419 dated February 5, 2017 – 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…it was an exciting week in the U.S. markets as we moved into the first trading in February. Up until Friday, it appeared that we would see the first down week since early November, but the last day of the week turned out to be a very strong one as the Dow Jones Industrial Average rose sharply to barely make up for losses earlier in the week.
Fortunately for Rumblings’ readers/investors, our Favorite Stocks for 2017 performed well – most significantly, the largest company on our list – and indeed, the most highly valued company in the world – Apple, Inc. – (AAPL), was up about 7 points for the week to $129.00. This was the best performance for the week by any of the largest companies, according to The New York Times. !
Rumblings suggests that its readers/investors do their due diligence, consult with their investment advisers, and consider adding Apple, Inc. to their portfolios as soon as possible for possible capital appreciation from this level of 25 – 50% in 2017. Rumblings also thinks that it’s a good time to sell bonds and re-invest the proceeds in stocks because of the economic, fiscal, and political outlook in the United States and elsewhere. Rumblings’ readers/investors should look at our list of Favorite Stocks for 2017 for this purpose as well.
And now, let’s look at “The Trader” column in tomorrow’s Barron’s, “The Dow Jones Business and Financial Weekly”, where the headline reads : “Dow Holds On to 20,000 – Just Barely”
The article starts off : “The Dow Jones’ Industrial Average needed a strong finish on Friday to end the week right back where it had started – above 20,000.
Stocks began the week on the wrong foot, with the Dow dropping 230 points on Monday and Tuesday. Whether because the market was reacting to President Donald Trump’s travel ban, as some observers suggested, or earnings disasters from companies like United Parcel Service and Under Armour, was immaterial – stocks looked headed for their first 1% weekly drop since early November.
And then they weren’t. Trump’s decision on Friday to roll back regulations on banks played a big role in getting the market’s juices flowing, as Goldman Sachs Group and JPMorgan Chase soared 4.6% and 3.1%, respectively. The Dow finished up 187 points, but close to flat on the week, something that “makes all the sense in the world,” says Greg Woodard, senior analyst at Manning & Napier. “The market is moving on every bit of political news.”
All told, the blue chips finished the week close to where they began, down 22 points, or 0.1%, at 20,071. The Standard & Poor’s 500 index and the Nasdaq Composite both picked up 0.1%, to 2,297 and 5,667 respectively.
It wasn’t all due to Trump, of course. On Wednesday, the Federal Reserve elected not to raise interest rates. No surprise there, but it also didn’t signal whether or not it would be raising rates in March.
That decision looked sound after Friday’s release of the January payrolls report, which revealed a large increase in jobs but muted wage growth. That would seem to indicate little inflation pressure, something that could allow the Fed to remain on hold – and buy investors time to see how Trump’s policies play out. “It was very much a wait-and-see message,” says Jason Pride, director of research at Glenmede.
But what are we waiting for ? Many investors appear to assume that the next market move will be higher and that they will be able to see the next downturn “coming a mile away,” says Adam Parker, chief U.S. equity strategist at Morgan Stanley. “We are worried there is a potential arrogance in adopting this view.”
He points out that just over a year ago, stocks were still trying to find a bottom following a plunge that left nearly everyone shell-shocked – and that the S&P 500 has gained 20% during the last 12 months.
“How can anyone be more bullish now?” Parker adds.
It’s a good question.
Rumblings suggests that readers/investors place no more than one percent of the funds they devote to common stocks in the securities of any one company. It’s best to diversify..!
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