Market Update News
December 18, 2017
Presented By:  Todd Day, Portfolio Manager

Another Winning Week on Wall Street

Stocks roared into the close on Friday as the passage of the vote on the tax bill came closer to reality.

It sure didn't look or feel that way on Thursday, however. Thursday's selloff came as Senator Rubio said no to the tax bill unless he got an increase in the child tax credit, and Senators Lee and Corker were still sitting on the fence, but that selloff became Friday's "Rubio's a yes rally" pushing all the major averages to new highs. The Dow is now up +25% year to date, the S&P 500 +19% and the NASDAQ +28%. The S&P 500 has recorded 61 new highs this year, while the Dow, 69 new highs.

As of this writing, the major averages are looking to extend Friday's gains and the major averages around the globe are all rallying on this hopium - sure would be ugly if they don't get the necessary votes - just saying..

There was not much in the way of earnings over the past week and probably the biggest headline came late in the week as Disney announced a $52.4 billion deal to buy most of 21st Century Fox pending regulatory approval.


As expected, the FED raised interest rates at last week's FOMC meeting and the markets were generally not phased. They also revised their 2018 growth forecast upward while lowering their expectations of unemployment. They did not revise their inflation forecasts and this is most in part because inflation has remained stubbornly low and they don't have a clue why.

Speaking of inflation, the latest read on inflation at the wholesale level (Producer Price Index) and the Consumer level (Consumer Price Index) paint a mixed picture. Hints of inflation have been appearing in "producer prices" including the November report where the headline rose a firm 0.4% for a third month in a row and the year-on-year rate, up 3 tenths to 3.1%, is the highest in nearly 6 years.

The CPI headline number rose 0.4% thanks to higher oil prices, but the core CPI (ex. food and energy) actually fell. A shrinking core CPI runs counter intuitive to a strong economy; in fact it suggests a struggling economy. What's more, we have seen commodities under a lot of pressure over the last couple of months. Is this move in commodities screaming of deflation ahead? This is not a healthy trend in what is a supposedly improving economy as commodities should be trading higher because demand is strong, but that is not happening. So what are commodities saying that stocks are not listening to? I'll be monitoring this...

America's small businesses haven't been this pumped up since the "roaring Reagan economy". NFIB Small Business Optimism Index keeps rising to the highest level since November 2004. 

Jobless claims keep falling to multi-decade lows.

Retail sales were up more than twice expectations - the fastest pace of growth since 2012 as online sales soared.


Across the pond, European stocks rose as the Bank of England (BOE) and the European Central Bank (ECB) kept rates unchanged. The BOE did warn of a softer economy in Q4 and predicts limited or gradual rate hikes. Though the ECB rates are steady, it did raise it's growth forecast as it sees little change in the inflation outlook.


With just nine trading days left in the year, the markets look to extend their rally right out of the gate as all eyes are on the vote. We don't have earnings to speak of and the economic data is limited to housing, durable goods and the final read on Q3 GDP - none of this is going to move the needle like the promise of the vote. Don't be surprised as we see a little sell-off because the markets have been baking in the cake the hopes of tax reform for about 12 months, so, not a massive sell-off, but I would not be surprised to see some relief selling (Buy the rumor-Sell the fact). 

Oh yeah - the Santa Claus Rally is Coming - Just not yet!!

As defined by Yale Hirsch in 1972 in the Stock Trader's Almanac (2018 edition page 114), the Santa Claus Rally is the last 5 trading days of the year and the first 2 of the New Year. The significance of the Santa Claus Rally is really when it " does not occur".

Please be safe in your travels over the holidays, enjoy the time with family and friends and join me back here in 2018 as I will review 2017 and preview what we will be watching in 2018.

Merry Christmas and Happy New Year to all!!

"There is no duty we so much underrate as the duty of being happy."
- Robert Louis Stevenson
Moroccan-Spiced Chicken and Couscous

Serves 6

  • 3 1/2 pounds of chicken thighs and drumsticks, or 12 pieces
  • Cooking spray
  • 1 teaspoon cumin
  • 1/2 teaspoon cardamom
  • 1/2 teaspoon cinnamon
  • 1 teaspoon salt
  • 1/2 teaspoon pepper
  • 3 1/2 cups couscous, cooked
  • 1/2 cup roasted peppers, chopped
  • 1/2 cup sliced almonds
  • 1/3 cup golden raisins
  • 2 green onions, finely chopped



     1.  Preheat oven to 475ºF.

    2.  Coat a large-rimmed baking sheet with cooking spray.

     3.  Arrange chicken on the baking sheet.

     4.  Mix together cumin, cardamom, cinnamon, salt, and pepper, and sprinkle
          over the chicken.

     5.  Place chicken in oven and roast for 35 minutes or until cooked thoroughly

     6.  Toss together cooked couscous, roasted peppers, almonds, raisins, and
          green onions.

     7.  Serve chicken on top of seasoned couscous.

Recipe adapted from Good Houskeeping

Manage Your Charitable Gifts

Throughout the year, many taxpayers choose to make charitable donations, which they can deduct on their tax returns. If you gave to a charity, you have some steps to take to ensure you have the correct proof for your tax records. Follow these tips to get started:

1. Written Acknowledgements
The IRS only requires you to have a written acknowledgment from the charity  when your gift or gifts exceed $250.

2. Multiple Gifts in One Year
You can either receive a written acknowledgement for each gift or a single acknowledgement listing all gifts over $250.

3. Additional Proof
The charity's written acknowledgement is one set of proof. You also need either a
bank record that shows the deducted gift or the charity's communication  (such as a card or email) verifying your gift.

Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tip courtesy of

Break the Wobble and Putt Straight

A wobbly putt can be wildly annoying. Despite lining up the shot and hitting confidently, the ball still goes off course. If the wobbles plague your short game, you may not be squaring your putterface. Its position will dictate your putt's direction, regardless of how well you envision the line.

To overcome this challenge, try the following:

     1.  Use a striped range ball and locate a straight 8-foot putt.

     2.  Build a "gate" using two tees. Set the tees slightly wider than the ball and
          toward the hole by 18 inches.

     3.  Line the ball so that the stripe is vertical and faces the cup.

     4.  Take your shot, and watch to ensure the ball travels clearly through the gate
          in a straight line without wobbling.

After a few putts, you should begin to see how squaring the putterface will help keep you steady.

Tip courtesy of Golf Digest

Keep Your Mouth and Gums Healthy

Our mouth, gums, and teeth can stay healthy throughout our lives-as long as you take care of them. With proper hygiene, you can avoid developing ailments like gum disease and tooth decay. Here are some oral-care tips to keep in mind:

  • Brushing: Remove plaque and bacteria that can lead to cavities by brushing twice a day, 30 minutes to 1 hour after eating. And brush for 2 to 3 minutes before rinsing.
  • Flossing: Dentists recommend flossing at least once each day to remove food that can stick between your teeth and turn to tartar. Be sure you floss around the tooth and within the gum lines with up-and-down movements.
  • Rinsing: A daily rinse of antibacterial mouthwash can further help you kill bacteria. Either before or after you brush, swish mouthwash for 30 to 60 seconds.
Tips adapted from WebMD

  Swap Using Bleach for This Natural Alternative

Bleach is a common item in many households and helps us to kill germs and keep our whites sparkling bright. But, bleach is also an abrasive chemical with health hazards, making it a toxic product to rely on. You can green up your lifestyle by using natural bleach alternatives.

Hydrogen Peroxide and Lemon Juice
As a natural product, hydrogen peroxide is a sanitizer and disinfectant. It can also help you whiten your laundry. By adding lemon juice, you increase the whitening effects and create a nice scent.

  • 3 cups water
  • 1/2 cup hydrogen peroxide
  • 2 tablespoons fresh lemon juice
How to Use:
In a quart-size jar or other container, mix together the ingredients. For laundry, add 1 cup of the solution to brighten the clothing. If you're scrubbing your kitchen or bathroom, toss in another 1/2 cup of hydrogen peroxide.

Tip adapted from

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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


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The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


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