Mid Day Outlook: December 27, 2017

Terrie AmengualDaily Market Report

Mid-Morning Look
Wednesday, December 27, 2017

Equities are quietly holding early gains, looking to rebound off slightly lower levels yesterday, but still on track to close out the final week of the trading year with solid gains across the board and near all-time record closing higher. Stocks have been buoyed this year by strong earnings, positive investor sentiment as the Trump Administration pushed forward business positive tax legislation and improving economic data showing the economy has picked up steam (leading to three rate hikes by the FOMC this year and 3 more projected in 2018). Year to date, the Dow is on track for a 25% gain, the S&P 500 a 19% gain and the Nasdaq Comp up 29%. There is a small pullback in some of yesterday’s winners as retail and energy stocks slip after leading markets yesterday, while tech rebounds. Oil prices pullback from more than 2 1/2 year highs after an explosion at a Libyan pipeline terminal yesterday. The Dow Industrials Average is currently higher, looking to snap its 2-day losing streak (hasn’t posted a streak of 3-down days since late September). Economic data was mixed (see below) while market news is relatively quiet.

Treasuries, Currencies and Commodities

  • In currency markets, the dollar slipped following a lower consumer confidence reading this morning; the euro topped the 1.19 level against the dollar, while the euro touched a more than 2-year high against the Japanese yen; Bitcoin pulls back over 3% after rallying yesterday
  • Commodity prices; Copper prices trade to 3 ½ year highs; precious metals with slight gains as gold looks for a 5th straight winning session; oil prices pullback from 2 ½ year highs yesterday following the Libyan terminal explosion as it raised supply fears (oil topped at $59.93 per barrel earlier today)
  • Treasury markets edging higher, with the yield on the benchmark 10-yr slipping a few basis points to 2.44%, down about 6 bps from year highs late last week; shorter term 2-yr yield up above 1.9% while the 30-yr holding around 2.78%

Economic Data

  • Consumer confidence in December fell to 122.1 vs. 128.6 prior month and below the 128.0 estimate; the present situation confidence rose to 156.6 vs. 154.9 last month, while the expectations fell to 99.1 vs. 111.0 last month
  • Pending home sales ticked up 0.2% in November according to the National Association of Realtors; November’s increase missed the consensus forecast of a 0.5% monthly gain; unadjusted pending homes up 0.6% y/y after rising 1.2% y/y in Oct.

Stock GAINERS

  • DPW ; entered its first co-location pact that will ultimately provide for the installation of 1k units digitally mining a mix of the top 10 cryptocurrencies
  • HTGM +13%; signed a new master collaboration agreement with Merck KGaA  in Germany
  • NTRI +0.5%; announced several new diet programs as it heads into the 2018 diet season
  • QRVO +2%; as chipmakers rebound following weakness yesterday after reports Apple has cut its sales forecast for the iPhone X (according to the Economic Daily News)
  • WATT +84%; received FCC certification for its wireless charging transmitter, WattUp Mid Field

Stock LAGGARDS

  • CELG -0.5%; downgraded to market perform at Bernstein as sees 2018 as a transition year for the company after series of significant setbacks; drugmaker needs to advance products in pipeline and rebuild its credibility
  • ELY -5%; downgraded to sell at Compass Point
  • FANG -1%; along with other E&Ps as energy stocks slide given the pullback in oil prices
  • KSS -1%; as retailers pullback after yesterday’s strong gains
  • TSLA -1%; Model 3 estimates lowered for 4Q, 2018 at KeyBanc and slightly for 2019

 

 

 

 
 

________________________________________________________________________________________

Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P.  Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.
 

Live Trading

Open an Account

Paper Trading

Register