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Morning Commentary

Trump: One Year in Review

By Charles Payne, CEO & Principal Analyst
11/9/2017 9:30 AM
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All three major indices finished higher for the day, subsequently continuing the string of record closes since Election Day:

There was big news late in the session on Wednesday. Is the Department of Justice (DOJ) demanding AT&T and Time Warner to dump CNN and DirecTV if they want to get their proposed merger through? 

AT&T CEO Randall Stephenson ripped the gloves off with the following statement:

Until now, we’ve never commented on our discussions with the DOJ. But given DOJ’s statement this afternoon, it’s important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so.

After the bell, we saw revenue beat from 21st Century Fox (FOXA) and guidance for the close of Skyline Corporation (Sky) News by June 30, 2018. The biggest upside mover was Roku (ROKU), which crushed Wall Street consensus with a much smaller loss than expected, sending its shares surging. 

The big winners during the session were consumer staples, led by Colgate-Palmolive (CL), Kellogg’s (K), and Kroger (KR), which is shifting its cloud spending to Microsoft and Google Cloud in order to compete with Amazon in the changing world of groceries.

Of course, the broad market doesn’t follow the lead of supermarket stocks, which points to a partial dilemma for investors.  We are seeing an increase in declining stocks; stocks hitting 52-week lows as leadership becomes stretched:

Dow Jones Industrial Average

NASDAQ

Trump Miracle

There is also an increasing concern over flattening bond yields, and the implication for the economy as this has been a red flag for pending recessions in the past.

A few quotes from President Trump’s speech to the South Korean National Assembly:

Like Korea, and since my election exactly one year ago today, I celebrate with you.

The United States is going through something of a miracle itself. Our stock market is at an all-time high. Unemployment is at a 17-year low. We are defeating ISIS. We are strengthening our judiciary, including a brilliant Supreme Court justice, and on and on and on.

It has been one heck of a year for President Trump. He continues through the sheer will of personality and aggressive use of executive orders to confound skeptics, and hurdles through many stumbles by his own party to put a very positive stamp on his presidency.

Employment

Employment has been brisk and while there were obviously extenuating circumstances for President Obama; there is almost an 8.0 million difference in job creation for the two administrations post-elections.

It’s hard to quantify how much of the economic needle moves the day after an election, but there is no doubt those businesses started to put plans into action, particularly after those plans have been on hold for years.

Equity Markets

The stock market returns are among the best in history. In fact, the 21% gain in the S&P 500 is the third best since WWII. Of course, if you add in the 870-point decline hit at midnight for the Dow Jones Industrial Average in futures trading, this is the most remarkable post-election day stretch in history.

Other Trump Wins

GDP Growth

There is still work to be done, and it’s going to take brave action from the GOP leadership on Capitol Hill.

Trump’s Checklist:

•             Tax Cuts

•             Repeal & Replace Obamacare

•             Build Wall

•             Immigration Reform

•             Fixing or Dumping the North American Free Trade Agreement (NAFTA)

Today’s Session

Lots of pressure on stocks ahead of the open, which might actually trigger additional selling because it’s been so long.  Many will wonder what all that red on the screen means and hit the ‘sell’ button, I’ve been waiting for a pullback in part to buy stocks on my list a little cheaper.  That being said, however, the market seems to be taking its cue from Washington DC hijinxes.

The Senate will release its tax bill, as the House continues to mark-up its version, and the turf war promises to add blemishes to both version making the final product less effective than it has to be.

Brick and mortar retail news are not impacting direction and while there are some big winners, most are from small names.  I like the action in Biotech led by PRGO this morning, but for the most part this is a wait-and-see session.  All eyes on Republicans in DC…can they get it together in this moment iof truth?

 

 

 

 

 

 


Comments
Let's not forget about infrastructure throughout the USA?

Allen Hare on 11/9/2017 10:15:25 AM
Charles, granted the stock market and the economy, as a whole, have improved IMMENSELY since President Trump took office a year ago, but in attempting to be "fair," President Obama inherited an AWFUL financial and economic nightmare when he took office and given the challenges he faced, did (at best) a mediocre job of guiding the "Ship Of State" through some pretty tough waters. I am NO SUPPORTER of the 8 miserable years under the (leadership?) of BHO, but in ALL FAIRNESS, we all know the nation's economy has HIGHS and LOWS and given Mr. Obama's LACK of business acumen and Mr. Trump's noted EXCELLENCE in guiding business around a wide VARIETY of pitfalls to remain in the "black," we should do our best to evaluate all "participants" once given the circumstances they face/faced while in the Oval Office.

James Warlin on 11/9/2017 12:47:12 PM
Well stated and succinct Charles. Thanks for making it understandable to the doubters. If Congress could get their collective acts together, we'd be even better-off. Haters always gonna hate!

kev on 11/9/2017 12:53:07 PM
James, with all due respect... Obama "inherited an economy" at a historic "rock-bottom", by his own admission. He made many decisions that hurt the US economy, leading to massive debt and sluggish growth. Trump can not be gauged by any similar standards, but his legacy over the last 12 months is undeniable. We should have been here in 2012 (at the latest) regarding growth. If one has one dollar, and gets a second dollar, it's 100% growth. That's what the Obama supporters don't get, and hide behind their favorable statistics.


kev on 11/9/2017 1:57:12 PM
 

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