Day 7: Good start for 2017


Today marked the first day the markets were open for 2017. What does this mean for Mother's Little Helper, nothing, except maybe that we've been patient for 7 days out of 365.

The portfolio closed the day UP with a gain of +0.19% for $930.64, reducing the overall portfolio loss to -$1,797.78. Currently we have 22 companies in the green and 52 still in the red. No new investments have been made. To date, TEVA Pharmaceuticals is our biggest gainer, up +2.15%.

NOISE:

President elect Trump targeted General Motors today in a tweet that seemed to lack all the details, but hey, it's a tweet, how much data can you include. First of all, I consider this story to be noise; entertaining noise, but market noise none-the-less. I don't trade around noise.

Here's the funny part; GM's CEO Mary Barra is a member of Trump's economic Strategy and Policy Forum. Unlike other CEO's, Mary shot back in a strong way.

"All Chevrolet Cruze sedans sold in the U.S. are built in GM's assembly plant in Lordstown, Ohio,"

"GM builds the Chevrolet Cruze hatchback for global markets in Mexico,

with a small number sold in the U.S."

Ford announced that it will cancel plans to build a $1.6 billion plant in Mexico, and will invest $700 million to expand its Flat Rock plant in Michigan. The factory will build autonomous and electric vehicles. Great! But this had nothing to do with Trump. Plans like this are in the works for years, Ford just chose a really good time to release the information.

DATA THAT MATTERS:

This is the information that mattered most today and provided real insight into what the US economy is doing and where it might be headed.

  • WTI crude oil fell $1.39 to $52.33 per barrel. (Good for companies bottom line, not good for stocks right now).

  • Wholesale gasoline shed $0.05 to $1.62 per gallon. (Too much inventory, bad for stocks but shouldn't be).

  • The Institute for Supply Management (ISM) Manufacturing Index for December rose to 54.7 up from November's 53.2 level, and inventories declined further below 50.

  • The Markit U.S. Manufacturing PMI Index was raised to 54.3 for December from the 54.2 level, where it was expected to remain. Values above 50 suggests expansion. Markit and ISM numbers differ because they are calculated differently, but always good to look at them together for a broad overview of US manufacturing.

  • Construction spending was up 0.9% month-over-month in November.

  • Treasuries were mixed today but it looks like Bonds are getting back into rally mode. I continue to be leery of bonds in general. In my personal portfolio I have shorted US treasuries. In practical terms, when bond prices decline I make money on my short position.

Stay Invested,

Clay Baker

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved