Quick Take: Rates, Earnings and Russia in Focus

My apologies for the dearth of morning missives this week. As I mentioned, I have been technology- and communications-challenged of late. However, the good news is that my tech travails appear to be coming to an end as I have a shiny new computer, a landline phone, AND upgraded internet. It will suffice to say that I am now a happy camper.

Here’s a “quick take” on what’s happening in the markets this morning – for those that aren’t on the golf course or at the beach with the kids, that is!

Hawkish comments from Super Mario, oil, earnings from the likes of Visa, GE, and Mr. Softie, and new developments in the Russia probe are capturing the attention of traders on this summer Friday. It is worth noting that both interest rates and the greenback are lower this morning. The dollar traded near two-year lows against the euro after comments from ECB President Mario Draghi were perceived as being more hawkish than anticipated.

Meanwhile, oil prices are lower on new supply concerns in front of next week’s meeting of both OPEC and non-OPEC members.

Next, generally speaking, earnings continue to be supportive for the market as the major indices continue to flirt with new all-time highs. The question, of course, is if earnings will be strong enough to (a) support higher prices from here (the S&P is up double digits already this year) and (b) keep valuation concerns at bay. (More on these topics next week.)

From an indicator standpoint, we have seen some improvement this week, but we must note that the levels of many models/indicators are not as robust as one might expect with the market at such lofty levels.

Thought For The Day:

Remember to think positive today 🙂

Current Market Drivers

We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can both identify and understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).

      1. The State of the U.S. Economic Growth (Fast enough to justify valuations?)

      2. The State of Earnings Growth

      3. The State of Trump Administration Policies

      4. The State of Fed Policy

Wishing you green screens and all the best for a great day,

David D. Moenning
Chief Investment Officer
Sowell Management Services

Disclosure: At the time of publication, Mr. Moenning and/or Sowell Management Services held long positions in the following securities mentioned: none. Note that positions may change at any time.


Disclosures

The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

David D. Moenning is an investment adviser representative of Sowell Management Services, a registered investment advisor. For a complete description of investment risks, fees and services, review the firm brochure (ADV Part 2) which is available by contacting Sowell. Sowell is not registered as a broker-dealer.

Employees and affiliates of Sowell may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Positions may change at any time.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Advisory services are offered through Sowell Management Services.