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Morning Commentary

Hail to the Chief

By Charles Payne, CEO & Principal Analyst
1/30/2018 9:30 AM
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Question of the Week

Gallup released its poll on how satisfied Americans are with institutions, attitudes, and the direction of the United States. The great news is that Americans are most satisfied with our military and security from terrorism, along with the state of the nation's economy.

What are your thoughts on the questions raised in the poll?

Post your answer below.

Tonight, President Trump will address the American public in his first ‘State of the Union,’ which promises to be must-see television. Just in time for the speech, Gallup released its poll on how satisfied Americans are with institutions, attitudes, and the direction of the United States. The great news is that Americans are most satisfied with our military and security from terrorism, along with the state of the nation’s economy.

Interestingly, a majority is satisfied with the position of women in the nation. While it’s in the bottom three, there is an overall spike in those satisfied with the state of race relations. The year-over-year shifts are great news for the White House, which rides a wave of momentum into the second year of President Trump’s presidency.

US Satisfaction
Gallup

2017

2018

% Point Change

Top Four

The nation's military strength and preparedness

66

78

+12

The nation's security from terrorism

50

63

+13

The position of women in the nation

-

58

-

The state of the nation's economy

46

58

+12

Bottom Three

The availability of affordable healthcare

39

31

-8

The state of race relations

22

29

+7

The availability of affordable healthcare

23

24

+1

 

Promises Made

Joint Session Congress Address February 28, 2017

What we are witnessing today is the renewal of the American spirit.  Our allies will find that America is once again ready to lead.  (Applause.)  All the nations of the world — friend or foe — will find that America is strong, America is proud, and America is free.

Dying industries will come roaring back to life.  Heroic veterans will get the care they so desperately need.  Our military will be given the resources its brave warriors so richly deserve.  Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways gleaming across our very, very beautiful land.  Our terrible drug epidemic will slow down and, ultimately, stop.  And our neglected inner cities will see a rebirth of hope, safety and opportunity.  Above all else, we will keep our promises to the American people.  (Applause.)

We have undertaken a historic effort to massively reduce job-crushing regulations, creating a deregulation task force inside of every government agency.  (Applause.)  And we’re imposing a new rule which mandates that for every one new regulation, two old regulations must be eliminated.  (Applause.)  We’re going to stop the regulations that threaten the future and livelihood of our great coal miners.  (Applause.)

To protect our citizens, I have directed the Department of Justice to form a Task Force on Reducing Violent Crime.  I have further ordered the Departments of Homeland Security and Justice, along with the Department of State and the Director of National Intelligence, to coordinate an aggressive strategy to dismantle the criminal cartels that have spread all across our nation.  (Applause.)  We will stop the drugs from pouring into our country and poisoning our youth, and we will expand treatment for those who have become so badly addicted.  (Applause.)

As promised, I directed the Department of Defense to develop a plan to demolish and destroy ISIS — a network of lawless savages that have slaughtered Muslims and Christians, and men, and women, and children of all faiths and all beliefs.  We will work with our allies, including our friends and allies in the Muslim world, to extinguish this vile enemy from our planet.  (Applause.)

Right now, American companies are taxed at one of the highest rates anywhere in the world.  My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone.  (Applause.)  It will be a big, big cut.

At the same time, we will provide massive tax relief for the middle class.  We must create a level playing field for American companies and our workers.  We have to do it.  (Applause.)  Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes.  But when foreign companies ship their products into America, we charge them nothing, or almost nothing.

To launch our national rebuilding, I will be asking Congress to approve legislation that produces a $1 trillion investment in infrastructure of the United States — financed through both public and private capital — creating millions of new jobs.  (Applause.)  This effort will be guided by two core principles:  buy American and hire American.  (Applause.)

Tonight, I am also calling on this Congress to repeal and replace Obamacare — (applause) — with reforms that expand choice, increase access, lower costs, and, at the same time, provide better healthcare.  (Applause.)

Mandating every American to buy government-approved health insurance was never the right solution for our country.  (Applause.)  The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we are going do.  (Applause.)

I am asking all citizens to embrace this renewal of the American spirit.  I am asking all members of Congress to join me in dreaming big, and bold, and daring things for our country.  I am asking everyone watching tonight to seize this moment.  Believe in yourselves, believe in your future, and believe, once more, in America.

Thank you, God bless you, and God bless the United States.  (Applause.)

Promises Kept

Moreover, Obamacare remains in place even with the removal of the individual mandate. Tonight, President Trump will reiterate his call on infrastructure.

Bipartisan Support and Massive Tax Benefits

The State of the Union address is much better than the mainstream media would ever give President Trump credit for. In fact, the checklist of promises made and kept outshines hypothetical stories from unnamed sources about actions that supposedly were going to happen but didn’t.

Look for a big push on infrastructure, which has bipartisan lip-service. Meanwhile, benefits from the Trump Tax cuts keep coming.  Late yesterday, ExxonMobil released this statement:

Tax and regulatory reform’s economic boon

At ExxonMobil, we plan to invest more than $50 billion over the next five years to expand our business in the United States. These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law.

Message of the market

Monday was a difficult session that saw stocks never gain any traction. While there wasn’t any panic, the selling picked up into the closing bell. All eleven S&P sectors were lower, including utilities, which continue to take it on the chin. This suggests investors aren’t clamoring for yield, and are not afraid of equities in general.

Still, there was lots of chatter on the impact of higher-bond yields on stocks. The ten-year yield has rallied to 2.72%, the highest level since April 2014.

I don’t see bond yields competing with upside potential of the market, considering the economic data and the favorable inflationary backdrop. Moreover, as you can see in the past market peaks, the ten- year yield was so much higher:

I’ll reassess this at 3.0%, but I’m not worried that this overdue bounce in yields is a reason enough to head for the hills.

Bond yields

I’m sure the noise will continue because there always has to be a reason for the market to be down beyond more selling than buying. On that note, there is excessive anxiety coming into the week. The Federal Open Market Committee (FOMC) gathering begins tomorrow big time. Tech names are reporting, and they must justify mind-boggling rallies. On Friday, we get the January jobs report.

After the Close


Comments
Charles, thanks, as always, for the breadth and depth of your analysis. Amid reactionary voices pushing either the sky is falling or nirvana has arrived, your balanced commentary is an anchor of reasonability and dependable guidance. May the Lord continue to watch over you and bless you.

Randy Earley on 1/30/2018 8:23:52 AM
This is no joke--- AN insurance salesman, a banker and a delivery guy (who lives in the clouds) got together to save the people $. I will hold all future comments on this until they show me.P.S. I was born in MO.--- Go prosper--- now is the time.

John on 1/30/2018 10:44:02 AM
Charles, in regard too the unclear use of the term "angst", in yesterday's write-up, I think the majority do understand "exactly" what you were and/or are implying, when using terminology of type, while speaking in general. I am a long time, "daily reader & follower" of Your content and radio/television shows. I for one, continue to be amazed at the mass amount of "In Depth" detail that You document, produce, and/or imply, whether it be from earnings reports, graphs, news, or even opinion and personal belief, etc.... It has become very obvious to me, You possess a Genuine Regard for others and for they're "well being" that goes far beyond Your Personal Interest & Desire to profit from sharing Your vast wealth of knowledge in markets & trading. In order to produce the amount of daily content in which You do, You obviously have some very enthusiastic people surrounding You, as well. Thank You for Your sincere dedication to those of us that count on You everyday. Sincerely, T.W. Harris

Thomas Harris on 1/30/2018 12:41:44 PM
today's market will probably scare a lot of people i took profits on stocks that seem vulnerable
Sold AMAZON LAST NIGHT THEN BOUGHT MORE THIS MORNING SOLD SOME NEAR THE CLOSE
PROBABLY LUCKY BUT LUCK BEATS THE HELL OUT OF LOSING
I LOOK FORWARD TO YOUR COMMENTS TONIGHT YOU ARE VERY GOOD

ERNEST REMUS on 1/30/2018 4:36:07 PM
Hi Charles,
Thanks so much for coming out to the Financial Fest in Scottsdale last Saturday. I really enjoyed attending your seminar and I learned much. I live up near Sedona in a small town so it wonderful we can attend financial seminars such as your within a 2 hour drive. My neighbors and I enjoy your show and we are definitely Fox watchers.
Thanks again,
Greg Noyes

Greg Noyes on 1/31/2018 12:22:09 PM
 

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