"Ladies and gentleman, children of all ages, welcome to The Greatest Show on Earth."

With all due respect to Ringling Brothers and Barnum & Bailey Circus, their show was once a must-see event. There is a greater circus these days and today could be a must-see performance for the ages. 

However, the Big Top that covers Washington, D.C. won’t be able to hide the testimony from former FBI Director James Comey. It will be the most watched testimony on TV this morning.

Yesterday was the combination of President Trump, who pushed his infrastructure plan, followed by the release of Comey’s opening statement. Actually, it saved the market from ending much lower after crude and gasoline inventories came in significantly higher than anticipated. The seven-page summary of memos was a mixed bag, but it stopped short of saying that President Trump tried to stop the Russian election investigation.

There will be debate over whether there was obstruction of justice with respect to Michael Flynn. Mainstream media will go nuts over the request for loyalty, but Comey corroborates the President’s claim that he wasn’t personally under FBI investigation.

Infrastructure

Bye, bye Miss American Pie
Drove my Chevy to the levee but the levee was dry
And them good ole boys were drinking whiskey and rye
Singin' this'll be the day that I die
This'll be the day that I die

-Don McLean

President Trump was in Cincinnati, Ohio yesterday. He discussed a first-class infrastructure system, and the importance of a modern system to allow our economy to flourish. This has always been a bipartisan topic as everyone complains about potholes and chunks of concrete falling off bridges – some even collapsing.

The key, like always, is how we will pay for this along with the novel idea of a true public-private partnership.  The following key areas of concern were addressed:

Levees (Grade D)

• Protect $1.3 trillion in property, including hundreds of universities that will need $80 billion over the next 10 years to bring them up to snuff.

Dams (Grade D)

• The average age of U.S. dams is 56 years old; 15,498 or 17% have “high-hazard potential” and need $45 billion to repair.

Inland Waterways (Grade D)

• 600 million tons of domestic freight is carried on inland waterways that equal to 14% of all inland waterways; 49% have experienced delays that have hurt the economy. 

As energy-related names began to weigh on stocks, major averages were just about to go negative when President Trump began to talk up his infrastructure plan.

Key stocks that have been the best barometer of Trump’s infrastructure stocks performed very well, and most traded better than the average daily volume:

• (VMC) Vulcan Materials
• (MLM) Martin Marietta Materials
• (USCR) U.S. Concrete
• (MTZ) Mas Tec

Wall Street understands the Trump economic agenda will happen and at some point, bills will pass for smaller versions of current proposals from the Obamacare replacement to taxes and to infrastructure.  

There is no doubt investors are eager for movement, although it doesn’t have to happen today; once it does, not only will the wheels of commerce move faster and create more well-paying jobs, but stocks also can rally higher having to check those critical boxes.

Broad Market

Market breadth underscored a tale of two markets as NASDAQ continues to have the most wind in its sail as chasing winners has become a “safe haven.”  There were more winners than losers on NASDAQ; the up volume was well above its down volume as 131 stocks hit fresh 52-week highs.

 

Market Breadth	NYSE	NASDAQ
Advancers	1,366	1,542
Decliners	1,493	1,321
Up Volume	239.1 million	923.7 million
Down Volume	313.1 million	555.4 million
New Highs	115	131
New Lows	68	70

Most sectors were higher except for energy, which took a massive hit after the Energy Information Agency (EIA) report.

Sector Performance	% Change
S&P 500 Index		+0.16%
Consumer Discretionary (XLY)		+0.18%
Consumer Staples (XLP)	-0.04%
Energy (XLE)	-1.41%
Financials (XLF)		+0.77%
Health Care (XLV)		+0.27%
Industrials (XLI)	-0.12%
Materials (XLB)		+0.13%
Real Estate (XLRE)		+0.53%
Technology (XLK)		+0.32%
Utilities (XLU)		+0.33%

Today’s Session

The biggest thing today is Comey, which could extend the Washington, D.C. drama that ultimately is about demising the outcome of the November election, which ironically was the goal of Vladimir Putin in the first place. 

Be that as it may, the market is extra sensitive to government scandal, and while investors have ignored the noise for the most part, the toughest moments for the market this year have been related by news from or about James Comey.

• March 21 market selloff after Comey made it official news that the FBI was investigating members of the Trump campaign for possible collusion with Russians.
• May 17, the day after the NY Times reported the Comey had memos underscoring his desire for the FBI to drop any investigation into Michael Flynn.

Make no mistake, there is a lot at stake today.   That being said, I continue to urge everyone to know and understand the underlying movement in this economy has begun. I don’t think it will be derailed unless there is some kind of impeachment attempt, and yesterday’s preview seems to have put that to bed.

Early stock market themes

• Tepid Start (all eyes on D.C. Circus)
• Chinese Internet Stocks surging after Alibaba offered strong guidance
• US Tech Giants Stay Hot (they’re on autopilot see NVIDIA)
• Higher End Brick and Mortar higher on news Nordstrom’s exploring going private
• Oil –Related Stocks lower as crude nears critical support point

Guys, we are cooling our heels, but more and more, I feel like a coiled spring ready to pounce. 

Stay tuned!

Stay ready!

If you are not a current subscriber to our Hotline Service, contact your representative or email info@wstreet.com to get started today. 

 

 

 

Comments

On a subject that SHOULD be (if it already), I suggest the following: I am very sick and tired of seeing and hearing the word "entitlement" used in sentences with Social Security and Medicare. Allan Greenspan, former FED Chairman, as you may recall, calls these welfare programs? AS I recall, my employers and I deposited hundreds of thousands of dollars into these programs. The fact that the federal government has mismanaged these funds and co-mingled these funds to pay other debts is illegal and criminal. They've already added penalties involving reduction of benefits and increases in monthly premiums for those making more than some set arbitrary amounts. Essentially, you receive less and less all the while your life expectancy becomes shorter and shorter. Talk about a giant PONZI scheme. This is it. "Greenspan is warning of a pending 'Entitlements Time Bomb.'" The problem, he says, is that welfare programs like Social Security and Medicare are legal entitlements that have nothing to do with real-world economics. When somebody reaches a certain age, they are legally entitled to benefits, whether the government is able to pay for them or not. And right now, the government doesn't have the means to pay. Greenspan says... "I don't know how it's going to resolve, but there's going to be a crisis." How can one be so sure about the coming crisis? If you look at the numbers, it's a mathematical certainty: Since 2010, Social Security has been paying out more than it has collected in taxes. And as millions of Baby Boomers retire, the shortfall gets even bigger. You Can't Count on Washington to Address This Crisis," because "they" CREATED it! James Warlin on 6/8/2017 12:09:54 PM

You are SO CORRECT about The Comey Comedy ! Comey needs to be prosecuted himself for leaking classified information to the friend with the intent of getting it to the newspaper for his own selfish motives. Prussia on 6/8/2017 4:57:12 PM

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