MARKETS CONTINUE BREAKING RECORDS. “The underlying economic story is positive and nothing on the surface tells us we need to be concerned right now” By Todd Horwitz, Bubba Trading.


Todd’s Daily Video Commentary can be found here:



A Record Climb

Stocks pushed further into record territory Tuesday. Rising shares of banks and health-care companies pushed the S&P 500 higher Tuesday, giving the broad index its best start to a year in more than half a century. Stocks have mostly climbed in the first trading days of 2018, extending last year’s rally. That is leaving investors hard pressed to find clues portending the rally’s end, especially as geopolitical tensions with North Korea appear to be easing and ahead of what analysts expect to be another batch of upbeat quarterly profit results.

Financial giants BlackRock, J.P. Morgan Chase and Wells Fargo are among the companies set to report quarterly results later this week. “Q4 is going to be fine,” said Maris Ogg, president at Tower Bridge Advisors. “I think the most important thing is going to be getting information on the impact of the tax cuts company by company. There’s no reason that shouldn’t be mostly positive. President Donald Trump signed a bill last month that cut the federal corporate tax rate to 21 percent from 35 percent.

The overall gains in the market are leading a number of investors to abandon defensive positions taken to protect against a downturn as indexes like the Dow industrials and the Nasdaq have reached new milestones in recent weeks. New data indicate that either demand for protection is low or investors are favoring bullish options on the S&P 500 instead. Robust global growth has been another reason sentiment has been boosts among investors going into the new year. “The underlying economic story is positive and nothing on the surface tells us we need to be concerned right now” said Paul Springmeyer, investment managing director at U.S. Bank Private Wealth Management.

The powerful combination of tax cuts and economic growth have kept markets marching upward, even though stock prices have grown to become more expensive than usual relative to corporate profits. “I would like to say that there’s something onerous coming, just because it would be different from what everyone is talking about,” said Nate Thooft, senior portfolio manager at Manulife Asset Management. But he expects the market to continue gliding higher as the economy and corporate profits strengthen.

Stocks also followed international markets higher on Tuesday. The Japanese Nikkei rose 0.6 percent after the Bank of Japan unexpectedly trimmed its long-dated government bonds purchases. The move raised speculation that the central bank could start unwinding its stimulative policy this year. It could also signal the BOJ’s confidence in the Japanese economy is growing. The Japanese yen traded 0.5 percent higher against the dollar following the announcement.

Keep those stops tight
Todd “Bubba” Horwitz


Financial & Political Commentary



, , , , , , ,

Related Posts

About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.