News Flow 1/19/2017

per dave lutz

INTO TRUMP– US Futures pretty Mixed to start this Thursday. NFLX up 8% — Bodes well for FANG and Big Tech / CSX up 12% on Harrison Headers and M&A / KMI off 2% on Numbers. Treasury Yields 10bp higher in last 2days as Yellen warns rates delay risks ‘nasty’ surprise and China dumps its holdings

Trading the day before and on Inauguration Day has been bearish for DJIA and S&P 500 since FDR’s second inauguration ceremony in 1937. New Presidents (shaded in grey) have been accompanied by even weaker market performance. The day after Inauguration Day is the most bullish of the three days, but not by an overwhelming margin — AlmanacTrader[jeffhirsch.tumblr.com]

“SPX had its 67th straight day without a 1% decline, longest streak in over 10 yrs.” — Longest streak of THIS bull market is 66

Longest Streak? After 184 trading days w/o a 1%+ drop for the S&P, index fell 1.3% on 11/21/63, then fell 2.81% on 11/22/63 (JFK assassination), then rallied 4% to regain all of the losses by 11/26/63 — Bespoke (Chart from LPL — Starts 1970)

One of the first tests[bloomberg.com] of the Trump administration will be what to do about the statutory limit on the nation’s debt, a favorite cudgel of anti-deficit Republicans, including Budget Director nominee Mick Mulvaney. Money market rates are already signaling disruptions going into the March 15 deadline

It sure is going to be a interesting first 100days. Sooooo Many people tho have said to “Sell the Inauguration” that i wonder if dire expectations r built in — “The first Trump Trade is over. This week, the second Trump Trade commenced. This trade will last, FT suspects[ft.com], until markets have learnt how to interact with a novel means of policy communication. It will involve increasing volatility, and the critical variable will be the dollar.” — The VIX failed a 50dma test yesterday ($12.82) and is off nearly 1% this AM despite the Futures being lower…

Newsletter writers classified as bulls by Investors Intelligence rebound to 60.6%, highest since July 2014 — High bullish reading is an “early warning for major market turns,” says Investors Intelligence

The Mexican peso is back in the firing line, dropping the most among major currencies on Wednesday as a report[ft.com] that the Trump administration is planning to renegotiate Nafta within days of taking office further cloud the outlook for Latin America’s number-two economy. PESO hitting FRESH all-time lows against the % this AM

DRAGHI UNCH– The European Central Bank has maintained[ft.com] its interest rates at record lows and left the pace of its bond-purchases unchanged at its January policy meeting, as president Mario Draghi prepares to field questions on an economic outlook full of threats — Today’s no change decision comes after policymakers announced they would be scaling back their €80bn quantitative easing measures from April at their last meeting of 2016.

Draghi Presser at 8:30 — Focus on Inflation commentary and Asset Purchas Mix.

Greg Blotnick — Investor

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Greg Blotnick is a long/short equity analyst and Columbia Business School student.