Investor’s first read – Daily edge before the open
DJIA: 21,008
S&P 500: 2,411
Nasdaq  Comp.:6,198
Russell 2000: 1,370
Thursday, June 1, 2017    9:08 a.m.
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TODAY
      Strange market !
Corporate earnings have little effect, the Fed has no clout, and incredibly foreboding news out of Washington has been unable to prompt a correction. In the past, such uncertainty has caused setbacks to a level that is thought to discount potential negatives.
      This stability is an indication of how much the Street is relying on the massive stimulus promised by Trump and Republicans.
       Obviously, if that expectation changes, so will the direction of stock prices.
        An early sell off yesterday was reversed as buyers showed up. A positive open can be expected to greet investors today, however there is some overhead supply to work through before new highs can be hit. Trading is becoming more volatile, perhaps a reflection of increasing angst about negative news out of the White House and an impeachment poll that indicated 43% of persons polled wanted Congress to initiate impeachment proceedings  against President Trump.
       Today’s attempt to rally is important. Bulls need to regain momentum, no room for a rally failure,    
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SUPPORT “today”:DJIA:20,903;S&P 500:2,406; Nasdaq Comp.:6,177
RESISTANCE “today” DJIA:21,049;S&P 500:2,416;Nasdaq Comp.:6,219

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CORPORATE EARNINGS
(updated  May 26, 2017)
Factset
      Q1 earnings are projected to increase 13.9%. Q2 growth  is projected at +6.8%, Q3 at +7.5%, and Q4 at +12.4%. For 2017 as a whole growth is projected at a plus 9.9%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently.
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 5/15/17)
      On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
      As of  April 25, 2017,  a reasonable risk is 20,856 a more extreme risk is 20,703.Near-term upside potential is 21,333
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POLITICAL/STOCK MARKET
 
TRUMP IN EUROPE
      One of my greatest concerns with Trump has been that his rash, pointless  actions will lead to the break up of NATO, and eventually the European Union. Clearly, nothing  would be higher on Vladimir Putin’s wish list.
      While Europe survived his foray last week, his refusal to ensure 28 NATO members the US has its back (Art.5 NATO treaty). He was indifferent to US/G7 trade and may withdraw from the Paris accord designed to curtail climate change.                                                                                                                                                                                                                      

      This is exactly what I meant when on January 3, I headlined this blog, “Trump – A Human Wrecking Ball.”
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COMEY TO TESTIFY

      Former FBI head, James Comey, is expected to testify before the Senate Intelligence Committee next week regarding his conversation with President Trump in the OVAL Office on January 27, where Trump reportedly urged Comey to shut down the investigation of Michael Flynn.
      Committee Republicans can be expected to discredit Comey and try to shift the focus on Comey/Clinton and Comey/Obama.
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Jared Kushner – The Plot Thickens
     
Last week NBC News reported that Jared Kushner has come under FBI scrutiny in the Russia investigation and new revelations that he had sought to establish  a secure and secret communications back channel with Russia last December when Kushner met with Russian ambassador Sergei KislyakFormer Trump National Security Advisor, Michael Flynn, also attended that meeting. 

      In my March 29 blog, I referred to a Kushner meeting with Sergey N. Gorkov, CEO of Vnesheconmbank (VEB) in December 2016. VEB has been subject to US sanctions for three years.  It is unclear what was discussed.
       What is a back channel ?  Generally, it is a direct, secret channel of communication between countries that bypasses official channels. They are not illegal, every president has used them. In Kushner’s case, it was reportedly intended to establish a line of communication for Michael Flynn, Trump’s chief national security adviser (since fired for lying) to communicate with Russia (presumably below standard diplomatic radar screens) about Syria and the Mid-East.  Apparently, Kushner suggested Russian diplomatic facilities be used as a pipeline, the goal thought to bypass surveillance by American intelligence agencies. That is probably where Kushner blew it.

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      President Trump’s budget is obviously DOA, with lots of blowback by Republicans looking to their prospects of re-election in 2018. The budget is a disgrace to who we are as Americans, as it skewers a portion of our society with little ability to defend itself, much less survive.     
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IMPEACHMENT
      A Morning Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.***
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HEALTHCARE:  NOW THE HOUSE REPUBLICANS OWN IT !
NOTE:
This is just the beginning and information is still sketchy. One excellent source is the Henry J. Kaiser Foundation (www.kff.org)
      The House narrowly passed the American Health Care Act (AHCA) last week by a vote of 217 to 213. 
      The House failed twice to pass a similar version. The bill was rushed through without pursuing standard practices – discussions and cost and consequence scoring, by the CBO.

      It now goes to the Senate where it will encounter changes and possibly rejection.

THE RISK !     

another meltdown ?
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PREUTERS WORLD NEWS APRIL 19, 4:20 PM
“A Russian government think tank controlled by Vladimir Putin developed a plan to swing the 2016 U.S. presidential election to Donald Trump and undermine voters’ faith in the American electoral system, three current and four former U.S. officials told Reuters.
      Russian documents appear to confirm what U.S. intelligence agencies have believed  all along that Russia influenced the outcome of our presidential election. 
      It recommended that a, “propaganda campaign on social media and Russian backed global news outlets to encourage U.S. voters to elect a president who would take a softer line toward Russia than the administration of then-President Barach Obama, the seven officials said.”
     Additionally, a second institute document recommended Russia end its pro-Trump propaganda and intensify messaging about voter fraud to undermine the U.S. electoral system’s legitimacy and damage Clinton’s reputation.
      So far, investigations by U.S. institutions and Congress have not concluded collusion between Trump’s team and Russian operatives occurred.
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TRUMP  – TOAST ?
      Just a hunch, but I think collusion regarding influencing the election is only part of something much bigger, like major league money transfers for options on oil investments, real estate holdings, and land deals. That’s why it is taking so much time.
      If we begin to see more and more of VP Pence, it may suggest the end for Trump is getting closer. Clearly, the inside knows something is about to break.  Trump is “toast,” IMVHO.
      There are so many people who know so much, and they are going to be watching out for number ONE, and that is not Donald Trump.

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TRUMP TO PUT US  ON  A WAR FOOTING !
      
Expect the Trump administration to put the United States on a war footing within one year, probably regarding North Korea.  For one, it would justify its big military spend. For another, it would facilitate a mid-term election victory, since voters are reluctant to change  Congress significantly when the nation is gearing up for war.. It worked for George Bush in 2003.  Finally, it would deflect attention away from the Trump/Russia issue, that could sink the administration.
ALL OF THE ABOVE HAS THE POTENTIAL TO ADVERSELY IMPACT THE STOCK MARKET  AND   MERITS CONSIDERATION.
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Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

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