News for the Week of February 13-17, 2017

News for the Week of February 13 – February 17, 2017

by David Abuaf, CFA

Investment Manager, RJFS

 

Government / Political / non-Economic

  1. The half-brother of North Korean leader Kim was killed under mysterious circumstances in Malaysia
    • He was actually waiting to board a commercial flight when a woman came up and put some cloth with poison on it – what was he doing being out in the open?
  2. Russia was accused of interfering in France’s presidential campaign by the front-runner in the race
  3. Flynn resigned as Trump’s national security adviser amid increasing fire over his conflicting statements about contacts with Russian officials before the inauguration
  4. Cyber attacks in Poland appear to be part of a global effort targeting banks
  5. A Mexican leftist is widening his lead in polls ahead of next year’s presidential election
  6. Intelligence officials have withheld sensitive information from Trump due to their concerns it could be leaked or compromised
  7. Motor vehicle deaths surged in the US for the second straight year in 2016

 

General Markets / Economic

  1. Yellen signaled that the Fed could consider a rate rise in March if the economy continues to strengthen
  2. OPEC said January oil output dropped, confirming its members have so far largely complied with cuts
  3. Increases in retail sales, factory output and inflation

 

Company News

  1. GM is weighing a sale of its Opel unit to France’s Peugeot, signaling a retreat from the European market – well of course, have you seen the size of American cars vs European!?
  2. Verizon and Yahoo are closing in on a deal that would cut the price for the internet firm’s core business by about $300m
  3. Ouch! Bank of America stock options awarded to top executives a decade ago expired worthless on Wednesday
  4. Workers at Boeing’s large plane making facility in South Carolina voted against joining a union

 

Interesting News

  1. A United Airlines pilot was tardy to her flight last weekend and arrived in civilian clothing before getting on the loudspeaker and ranting, among other things, about her recent divorce and politics
  2. A drug addicted mother of 4 was ordered by a NY judge to not get pregnant – because…yeah, it doesn’t make sense, even without my usual cynicism!
  3. After years of war, it turns out Syrians are big fans of the board game Risk

 

 

 

 

Commentary for the Week of February 13 – February 17, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

Chart from Barrons

 

The wild and crazy week in Washington wasn’t enough to prevent major indexes from closing at all-time highs. What’s driving the market higher though? It certainly isn’t Washington hijinks. Investors continue to wait for the pro-business policies Trump has promised. But instead of passing tax cuts last week, Trump was forced to deny accusations of ties to Russia, and GOP lawmakers spent their time defending the president, instead of writing laws.

 

The market has clearly been willing to wait as long as the economy keeps on keeping on. Data reported last week revealed robust retail sales, firming inflation, and rebounding manufacturing. That improving data, more than talk of a Trump bump, appears to have sent the markets higher. According to Joseph Mezrich at Instinet, there has been a gap between leading economic indicators and baskets of economically sensitive stocks and when the gap between the two gets too wide, stocks typically play catch up. “There is, in fact, an economic expansion behind this market rally.” While that may be too aggressive for this particular author, it could also be true!

 

Market juices do appear to be flowing in a big way, as companies have shown a willingness to explore major mergers.

 

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services. 

 

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