Market Not Concerned – YET !

Investor’s first read – Daily edge before the open
DJIA: 21,235
S&P 500: 2,429
Nasdaq  Comp.:6,175

Russell 2000: 1,419
Tuesday, June 13, 2017    9:01 a.m.
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The Federal Open Market Committee (FOMC) releases the minutes of its May meeting Wednesday followed  by Fed Chief Janet Yellen’s press conference.  Another bump in interest rates is expected, even in face of a stalled economy.  Yellen may shed light on the Fed’s plan to normalize its balance sheet, which should start before year-end.
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       Saturday, Barry Ritholtz penned a Bloomberg piece, “Trump’s Economic Agenda is Almost Dead,” where he noted, the “self-inflicted wounds of the most undisciplined presidency in history” stand to blow an opportunity to pass the massive stimulus promised by the election of Donald Trump.
      Another Bloomberg article, “Trump Bump in U.S. Growth Forecast Finds Its Limits,” tapped 44 economists for a survey.  Compared with a March, 27% of those polled cut their forecast this month compared with March when 14% did.
       Investors here and abroad are getting nervous about the  timing of the  stimulus promised by the Republicans. 
       Technology stocks in Europe and Asia  tanked overnight after the rout in Nasdaq stocks Friday. Futures trading here suggests another sell off in Nasdaq at the open.
        Can the weakness in the highfliers spill over to the rest of the market ?

        The S&P 500 trades at  17.7 times earnings (P/E) projected 12 months out compared with a 10-year average of 14.
         Obviously, that overvaluation reflects the Street’s expectation of a massive stimulus.  Obviously, that is not happening as fast as the Street hoped. While the Trump administration plans to ram a half-assed replacement of Obamacare through before June 30, tax cuts, deregulation and Congressional approval of a big spend on infrastructure and/or the military may not happen soon enough to head off a correction in the market.
        What’s more, Trump may press for a debt ceiling showdown in August/September with Congress if he doesn’t get his way on the stimulus.
        The Obama bull market  was up 225% (to Nov.9), the Trump bump added  11.2% to that. There is room for an 8% – 12% correction if  the big hitters break ranks and dump indiscriminately.
TODAY
        Following Friday’s hammering of the Nasdaq Comp., its weakness had a chance spread to the more stable DJIA and S&P 500.   It didn’t !

        It may try again this week.  Generally, when a market is ready to go down in a big way, it does so without hesitation.
        If the Street suddenly becomes wary, there will be little doubt about it.  Bids will vanish, selling increase.
       In an effort to throw up a smokescreen to cloud the adverse impact of the Trump/Russia probe, the administration will hype prospective stimulus programs, such as infrastructure, healthcare, Dodd-Frank repeal, and tax reform. 
        All this will smack of haste and chaos for an administration that is only partly staffed and having trouble hiring quality people for the obvious reasons. Oh my !  How could so much ineptness happen at this level ? 

         So far, the Street doesn’t care. Maybe that’s because all this bizarre behavior was not programmed into the algos that do the Street’s thinking – but really how could it, you know, who would ever think……..                                              .                                                                                                                                                                                                                              >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”:DJIA: 21,168;S&P 500:2,421; Nasdaq Comp.:6,128
RESISTANCE “today” DJIA:21,297;S&P 500:2,439;Nasdaq Comp.:6,121

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CORPORATE EARNINGS
(updated June 9, 2017)
Factset
      Q1 earnings are projected to increase 14.0%.      Q2 growth  is projected at +6.6%, 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 17.7 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 which was hit yesterday.
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POLITICAL/STOCK MARKET
SENATE READY TO PASS ACA REPEAL/REPLACEMENT
     
Senator McConnell has started the process known as Rule 14, enabling the Senate to bypass standard procedures, including committee hearings and markups, in a desperate attempt to ram a bill  on the replacement of ACA through before the July 4th recess. The strategy is to push it through quickly before any opposition can develop.
      The Republicans now “own” healthcare after 8 years and 55. attempts to skewer ACA.  Really, we are talking about people’s health, their ability to live without pain and problems that get worse until the person is helpless, or dies. Millions will be at new risk, futures wiped out.
      Where is the shame, the guilt ? Reportedly, big earners will get a tax break from the new  healthcare bill the Republican Senators pass. My guess is many of those individuals would gladly forfeit that financial benefit in favor of helping people in dire need of healthcare. These are people who make the big bucks, because they are very good at what they do. 
      This isn’t what most of them want. This is about an extremist Republican Congress that wants a “win,” They want to beat Obamacare, beat liberals, beat a  black man who dared to become president. 
     These aren’t the Republicans who battled with Democrats over the years to make America great, these aren’t conservatives who provided different but viable views that embellished legislation, these are constitutional anarchists, who want to wipe the slate clean, and build their own government with selective benefits doled out to people who support them.

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      ANYONE SEE JARED KUSHNER ?    ?????
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      Attorney General Jeffrey Sessions testifies before the Senate Intelligence Committee today (Tuesday June 13) at 2 p.m..
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      If you watched Fox News, you are relieved that there was no smoking gun following former FBI director James Comey’s testimony Thursday before the Senate Intelligence Committee.
      If you watched another less biased TV channel, you are convinced this is just the beginning of a long, open-ended investigation of potential wrongdoing by the Trump team before and after the 2016 election. I have no doubt the Trump people knew what the Russians were doing, even aided and abetted them along the way.  The Quid pro quo here is where it begins to really smell.

       I am prepping for the unearthing of the biggest political scandal in our history. Watergate was double-A ball, the is  the “BIGS.”
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“Connect the Dots.” This investigation is open-ended
      
Farage – Trump- Sessions – Mercer – Cambridge Analytics – Bannon- Page – Kushner – Michael Cohn – Flynn – JD Gordon  – Breitbart – Stone – Assange – Manafort – Russia all connect directly or indirectly to the Trump/Russia investigation and have a connection to Brexit, as well. According to the “Observer, Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.
      Additionally,  Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz has represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.  hmmm.
       WHY SO MANY RUSSIANS ? WHY ALL THESE RUSSIAN CONNECTIONS ?  THIS IS GETTING BIGGER – IMHO THIS WILL BE THE BIGGEST SCANDAL “EVER” AND MAY TAKE YEARS TO FULLY UNWIND.
          Was there a GLOBAL POWER PLAY here ?  Britain, United States, France, Netherlands, Sweden, Italy ?   Who was the puppeteer who were the puppets ?
        The new kid on the FBI “person of interest” block in its US counter-intelligence investigation is Nigel Farage, a Brit, former UK Independence Party (UKIP)  leader and tactician for Brexit. He may be positioned to have a lot of pertinent information about 2016 election tampering. Reportedly, he has had direct or indirect contact with all of the above.  …………………………………………………………………………………..
      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  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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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  IS 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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