Big Week -Tax Plan, Shutdown, etc.

Investor’s first read – Daily edge before the open
DJIA: 20,547
S&P 500: 2,348
Nasdaq  Comp.:5,910
Russell 2000:5,910
Monday, April  24, 2017    9:15 a.m.
      Stock markets and bond markets here and abroad will be up today following the first round of voting for the presidency in France Sunday, moving centrist Emmaneul Macron and right wing, nationalist Marine Le Pen to the runoff on May 7.

      Macron is currently the favorite to win by a wide margin, a poll showing a 62 percent to 38 percent edge for Macron.  The French CAC 40, the German DAX and Euro Stoxx surged after the results were known with banks the biggest winners.  Safe havens, gold, the yen, Treasuries and German bunds slid.
      While a Macron victory would be a rejection of the anti-establishment , Brexit, Trump mentality, it won’t go away and plague Macron going forward.
       What’s more the present euphoria stands to yield to uneasiness as the gap of support Macron enjoys now will narrow as the May 7, election day. approaches.

      Stock index futures indicate a surge at the open, possibly 150 – 200 Dow points.
      A good portion of that is the French vote, but the Street’s spirits were picked up over the weekend with Trump’s announcement that he will introduce his tax proposal this Wednesday, though OMB director, Mick Mulvaney, says details won’t be available until June.
      That announcement  precedes the Friday, April 28, deadline for Congress to avoid a government shutdown. More than likely, a stopgap bill will be passed to buy time. Unlike in 2013, the deadline does not coincide with the need for an increase in the debt ceiling.
      Complicating the deadline would be an ultimatum for Democrats to approve funding for Trump’s WALL. The Republican’s would love to force a shutdown by the Democrats who are opposed to spending tens of billions of dollars on the wall at the expense of numerous government programs that benefit a broad sector of the population.
      Trump is totally focused on how his first 100 days will be reported, and can be expected to stop at nothing to salvage what is shaping up to be a disgraceful demonstration of untethered egomaniacostracity.
       This is a dangerous spike in prices to buy all but very selectively.
SUPPORT “today”:DJIA:20,511;S&P 500:2,346; Nasdaq Comp.:5,904
RESISTANCE:“today”:DJIA:20,656;S&P500:2,363;NASDAQ Comp.:5,941


     Last Thursday, dozens of psychiatrists met at Yale University, concluding they have an ethical responsibility to warn Americans that in their opinion President Trump  is not fit to be president, that he is paranoid and delusional.
     Really ?

“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. 
      Yesterday, Reuters released documents, which were prepared by the Russian Institute for Strategic Studies[https://en.riss/], after the election that confirm this conclusion.
      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.
     But U.S. investigations are still being conducted.
     I personally believe collusion DID take place, and odds are GOOD that it reaches far beyond collusion, that based on what I see and how people in the administration are acting.
     Reportedly, there is no mechanism in the U.S. Constitution that enables voters to recall at the federal level, though 19 states permit recalls at the state and local levels. Impeachment is the only recourse in the event high crimes and misdemeanors are committed.
      The truth may never be confirmed, it being so debilitating to orderly and effective governance, that it would  result in irreparable divisiveness.

       Now it’s VP Pence’s turn to talk tough. Wednesday, he addressed American troops aboard the USS Ronald Reagan where stated, “The United States of America will always seek peace, but under President Trump, the shield stands guard and the sword stands ready.” That’s another way of saying negotiate, or else.
       It could be significant that Pence is the one out there, not Trump.   Are they preparing for the possibility of scandalous  news on Trump breaking, but don’t know when ?

Monday, President Trump slammed the media with a tweet, “The fake media has gotten even worse since the election. Every story is badly slanted. We have to hold them to the truth.”
      He has referred to the investigation of collusion between the Trump team and Russians to skew the election in his favor as, a “phony story,” a “total scam.”
      Sounds like he is setting the stage for news releases indicating collusion.  Really, why would the President of the United States take time early in the day with other things on his plate, to tweet this kind of rubbish ?

      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, 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.
      While President Trump has moderated on some of his campaign rhetoric, he is unpredictable and unqualified to make decisions at this level, but Congress will waste little time seizing an opportunity of their lifetime – to ruthlessly, senselessly and wantonly dismember a system that works well without the intrusion of Republicans.
      The rape and pillage of our federal government continues, as Republican Thomas Massie  introduced a bill in February aimed at terminating the Department of Education effective December 31, 2018. This coincided with the Senate confirmation of Conservative Betsy DeVos, a long time advocate of school vouchers and critic of public education.

      As a budget is being developed, we can expect a major revamping of the nation’s government structure and huge cuts.
      Mick Mulvaney, director of the Office of Management and Budget plans to streamline the U.S. government structure by drastic reallocation of resources away from social “Great Society” programs to the Dept. of Defense and Homeland Security.
      Action is already underway to gut the EPA and Dept. of Education, but the administration’s efforts are bound to encounter Congressional opposition, since budget cuts and the elimination of agencies will undoubtedly have widespread impact, none the least of which may be the loss of Republican House and Senate seats in 2018.
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.

CORPORATE EARNINGS (updated  April 14, 2017)
      Q1 earnings are projected to increase 9.2%. That compares with a Q1 est. on Dec. 31 of +12.5%.  Q2 growth  is projected at +8.7%, Q3 at +8.2%, and Q4 at +12.6%. For 2017 as a whole growth is projected at a plus 9.7% down from Dec. 31 estimates of 11.6%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
:  (UPDATED 4/13/17 and )
      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  March 29, 2017,  a reasonable risk is 20,413 a more extreme risk is 20,196.Near-term upside potential is 20,676
1-Trump’s presidency will implode within three years, Bannon will be gone, along with Breitbart News and Alt-Right’ influence.
2-Trump will put the United States on a war footing with North Korea in coming months with or without China’s cooperation.

Conclusion: It is happening now
3-Expect major domestic violence this summer as alt-Right groups confront protestors against tax reform and Congress’ gutting of a host of popular government programs.

Conclusion: It started on Easter weekend in Berkeley.
4-Seeds of a recession will be planted as Congress guts programs needed and used by millions.  Stock market has its final run.
5-Social Security and Medicare will be targeted for drastic changes if the Republicans hold control of both houses in 2018 and Congress is successful in gutting most of social service programs and the EPA per Trump’s wish list.     
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                       Note: Source of weekly economic calendar and good recap of  indicators:
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
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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