Mike’s Morning Brief: A fast-break rundown of what’s going on.
Market opened flattish after yesterday saw the 10th record close since the inauguration. S&P 500 hit $20 Trillion in Market Cap for the first time in history. It is now up 10% since the election. The rally has hit a stage where it feels overbought. Bears and skeptics appear to have thrown in the towel fighting this tape. It feels like it’s ahead of itself and another breather or selloff is warranted. Corporate earnings and economic growth, both here and abroad, have accelerated. The Market has gone a long way to price it in. We see more signs of leadership rotation, but in general we are banking some gains and building up cash to buy weakness. Financials have gone straight up and need to correct the moves a bit. Conversely, Energy is an area that looks set for another run. WTI has gone sideways for months in the low $50’s, consolidating the 100% gain from the 2016 lows. A move towards $60 is very doable. Russia overtook the Saudi’s as the largest oil producer. Interest rates are ticking down ahead of the Fed Minute release this morning. The Market is looking for clues as to how many rate hikes are ahead. The Dollar is staying firm. So is Gold.
Have a great day.