Things Coming to a Head

Investor’s first read – Daily edge before the open
DJIA: 21,328
S&P 500: 2,440
Nasdaq  Comp.:6,220
Russell 2000: 1,425
Wednesday, June 14, 2017    9:03 a.m.
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The Federal Open Market Committee (FOMC) releases the minutes of its May meeting today followed  by Fed Chief Janet Yellen’s press conference.  Another bump in interest rates is expected, even in face of a stalled economy and lack of inflationary pressures (Apr. annual rate of 1.5%).  For 2017, the Fed expected three rate increases.  Continued softness could reduce the increases for the year to two.
      Chair  Yellen may shed light on the Fed’s plan to normalize (shrink)  its $4,5 trillion balance sheet, which will start this year.
       In spite of rising consumer confidence/sentiment indicators, economic growth is not showing up in retail and motor vehicle sales.

       This prompted Barry Ritholtz Bloomberg article,“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.

        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. Nice to have something to look forward to.
TODAY
     
The current economic expansion is eight years old. During that time there have been numerous pauses in its tepid growth.
      The surge in stock prices since election day reflects expectation for a massive stimulus, not the market’s assessment of the current economy.  Based on the latter, the market is very overvalued.
       The Nasdaq Comp. has not recovered from the drubbing it took last Friday, while the DJIA hit a new high yesterday and S&P 500  recouped most of its loss since then.
      This could mean the Street is shifting focus to the bluer chips from the highfliers in face of doubts about the timing of the stimulus.      

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SUPPORT “today”:DJIA:21,273;S&P 500:2,436; Nasdaq Comp.:6,187
RESISTANCE “today” DJIA:21,367;S&P 500:2,447;Nasdaq Comp.:6,248

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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 6/13/17)
      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 21,951 a more extreme risk is 20,703.Near-term upside potential is 21,418.
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POLITICAL/STOCK MARKET
 SENATE INTELLIGENCE COMMITTEE  – Sessions, Attorney General
     
I watched the testimony of U.S. Attorney General, Jeff Sessions, yesterday.  What an unimpressive person.  His Mickey Rooneyish  self righteousness was galling.
      If he didn’t know anything about Russian tampering with our elections, he should have, he is the U.S. Attorney General. He was active in Trump’s campaign, was sworn in on February 9 and recused himself on March 2.  He knew nothing –  did nothing ?  He should have an intimate knowledge of this grave threat to our election process.
      It was sad to watch his defense attorneys (Republican Senate Intelligence Committee members) serve him one layup after another, instead of drilling down in search of the truth. That’s what’s flawed about Congressional committees.
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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      If you watched Fox News, you were relieved that there was no smoking gun following former FBI director James Comey’s testimony 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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