- Wednesday was another session with mixed results. Major equity indices edged higher, except for the Dow Jones Industrial Average, which was fractionally lower. The NASDAQ Composite and Russell 2000 finished at fresh all-time highs:
- Dow: -0.17%
- S&P 500: +0.17%
- NASDAQ: +0.72%
- Russell 2000: +0.80%
Beneath the surface, the session was more impressive as advancers and up volume outpaced decliners and down volume. For the NYSE and NASDAQ, 357 stocks closed at 52-week highs against only 74 new lows.
The story of the Wednesday’s session was Disney’s enhanced bid for Fox entertainment assets.
Yesterday, the stock of the day was Winnebago (WGO), which posted record quarterly revenue and earnings. Americans have cash, and want to live in the moment, and have the confidence to make it happen.
The trend of that session was momentum as hot stocks got hotter, especially big tech names such as Amazon (AMZN), Facebook (FB), and Google (GOOG), all closing at all-time highs. There’s an old Wall Street axiom that ‘new highs beget new highs’- that’s truer than ever at the moment.
After the close, Hewlett-Packard (HPQ) announced a $4.0 billion buyback, which underscores another major driver of the market. Buybacks are being attacked by progressives as corporate largess, suggesting that the money doesn’t belong to corporations in the first place. Economic purists also think the practice is unseemly. A lot of people are up in arms about buybacks, but there is going to be an avalanche of them.
Summation
These trends will carry until earnings season, which will be the ultimate period of hit-or-miss with winners edging higher, but those names that disappoint will be crushed. The biggest plus for investors and the stock market is the economic backdrop that can only be derailed by a wayward Federal Reserve or an asteroid that tilts the Earth’s axis.
Recommended
The Economic Boom
I continue to say the same economic tide lifts all ships; yesterday, we got more proof that it is happening in America right now.
Manufacturing Renaissance
I talked about the manufacturing renaissance, even before President Trump was sworn in, as we saw the fortunes change immediately on Election Day.
Initially, it was all about the excitement and all about the possibilities. These days, it’s about the actual results and momentum. There are 374,000 more people working in manufacturing than in January 2017, something experts said was impossible.
Meanwhile, the National Association of Manufacturers (NAM) found 95% of manufacturers have a “positive outlook for their companies.”
Highlights:
• Optimism among medium-sized manufacturers registered its highest level ever recorded (95.8%) in the 20-year history of the survey
• All-time highs for projected employment growth and capital spending
• Projected wage growth registered at its fastest pace in 17 years
• Projected sales growth kept pace at its second-highest reading in the survey’s history
Getting off the Dole
Social Security Disability Benefits
Also, 1.5 million fewer Americans applied for Social Security disability last year, and this year will be even fewer. During the Great Recession, when so many people took the benefits, the program almost went bust. Reserves crashed from $215 billion to just $32 billion by 2015.
Food Stamp Usage Decline
And then, there’s the food stamp program, which stood at 45.6 million individuals when the current fiscal year began. That number is now down to just 40.1 million.
Key milestones, including the current level of 40 million, is down more than 5.5 million in this fiscal year (begins in October). It’s down 7.8 million from a high reached back in December 2012. The number was 42.7 million when Trump took office.
SNAP Participation | Individuals | Households |
Mar 2018 | 40,083,954 | 20,056.050 |
Oct 2017 | 45,596,018 | 22,040,331 |
Dec 2012 | 47,792,056 | 23,064,564 |
Jan 2017 | 42,676,312 | 21,231,543 |
Mainstream media will never start a show with these numbers, but I think Main Street knows what’s happening.
Today’s Session
Equities have been under pressure all morning long but are off the worst levels. Although, there is still anxiety over a variety of issues that have pressured the Dow Jones Industrial Average to a seven- day losing streak. On the other hand, there are amazing things happening in our economy, and that's reflected in the series of all-time highs achieved by the Russell 2000.
This morning three news items resonate.
- Darden Restaurants (DRI) earnings crushed expectations that that stock is significantly higher.
- Kroger(KR) posted results that show it can compete in an Amazon/Wholefoods world.
- Dollar General is (DG) looking for 7,000 new managers in 44 states- amazing news.
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