Harvest Investment Focus 171508 - Amazon S3 · Stocks wavered between gains and losses last week as...
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All investments involve risk, including loss of principal. Principal values and investments returns are neither guaranteed nor issued by, guaranteed by, or obligations of a bank, savings and loan, or credit union; and are not insured or guaranteed by the FDIC, SIPC, NCUSIF or any other agency. Portions of this newsletter was prepared by W E Sherman & Co., LLC. W E Sherman & Co., LLC is not affiliated with ProEquities or Harvest Investment Services, LLC. Advisory Services offered through Harvest Investment Services, LLC, a Registered Investment Advisor. Securities offered through ProEquities, Inc. A Registered Broker-Dealer and Member FINRA and SIPC. Harvest Financial Planning, LLC and Harvest Investment Services, LLC are independent of ProEquities, Inc Market Focus: Stocks wavered between gains and losses last week as traders eyed the progress of tax reform and digested the latest rate hike by the Fed. The S&P 500 gained 0.92% on the week and is up 19.52% year to date. Trading was quiet to start the week Monday, as the S&P grinded higher mostly on momentum to close at an all-time high. Investors shrugged off the attempted terror attack in a New York subway station, and a strong imbalance of Market on Close buy orders saw indexes sprint into the close to add 0.32% on the day. Stocks rallied to another set of all-time highs on Tuesday with the S&P adding 0.15% thanks to a reflation rally that was initiated by a hotter-than-expected PPI report and more optimism surrounding the tax bill. Wednesday was a day of pause for stocks as the FOMC provided no surprises while the underwhelming CPI report halted the reflation momentum from Tuesday resulting in a 0.05% loss on the S&P. Volatility edged up on Thursday despite generally good economic data as worries about the tax bill weighed on sentiment. Global Flash PMI data was all better than expected, but Sen. Rubio’s announcement of a potential “no” vote in the afternoon saw stocks come for sale, and the benchmark index closed down 0.41%. The weakness on Thursday proved to be short-lived, as stocks roared back to hit fresh all-time highs on Friday thanks to an increasingly favorable outlook for successful tax reform. The S&P 500 gapped higher at the open and continued to churn higher over the course of the day. Economic Focus: Passage of US tax bill expected next week Republican leaders in the US House of Representatives and Senate hashed out a compromise tax bill this week, although a few Republican Senators are still pushing for additional changes. The package is expected to be voted on in the Senate on Tuesday and in the House on Wednesday before being signed by President Donald Trump on Thursday, if all goes well for the Republicans. At the same time, a stop- gap funding bill to keep the government in operation until mid-January is in the works and needs to be passed by Friday, 22 December when funding runs out. It appears that there is agreement between Democratic and Republican leaders on passing a continuing resolution that pushes a potential shutdown into mid-January. for the week ending December 15 th , 2017
Transcript of Harvest Investment Focus 171508 - Amazon S3 · Stocks wavered between gains and losses last week as...
Allinvestmentsinvolverisk,includinglossofprincipal.Principalvaluesandinvestmentsreturnsareneitherguaranteednorissuedby,guaranteedby,orobligationsofabank,savingsandloan,orcreditunion;andarenotinsuredorguaranteedbytheFDIC,SIPC,NCUSIForanyotheragency.PortionsofthisnewsletterwaspreparedbyWESherman&Co.,LLC.WESherman&Co.,LLCisnotaffiliatedwithProEquitiesorHarvestInvestmentServices,LLC.AdvisoryServicesoffered
throughHarvestInvestmentServices,LLC,aRegisteredInvestmentAdvisor.SecuritiesofferedthroughProEquities,Inc.ARegisteredBroker-DealerandMemberFINRAandSIPC.HarvestFinancialPlanning,LLCandHarvestInvestmentServices,LLCareindependentofProEquities,Inc
MarketFocus:
StockswaveredbetweengainsandlosseslastweekastraderseyedtheprogressoftaxreformanddigestedthelatestratehikebytheFed.TheS&P500gained0.92%ontheweekandisup19.52%yeartodate.
TradingwasquiettostarttheweekMonday,astheS&Pgrindedhighermostlyonmomentumtocloseatanall-timehigh.InvestorsshruggedofftheattemptedterrorattackinaNewYorksubwaystation,andastrongimbalanceofMarketonClosebuyorderssawindexessprintintotheclosetoadd0.32%ontheday.
Stocksralliedtoanothersetofall-timehighsonTuesdaywiththeS&Padding0.15%thankstoareflationrallythatwasinitiatedbyahotter-than-expectedPPIreportandmoreoptimismsurroundingthetaxbill.
WednesdaywasadayofpauseforstocksastheFOMCprovidednosurpriseswhiletheunderwhelmingCPIreporthaltedthereflationmomentumfromTuesdayresultingina0.05%lossontheS&P.
VolatilityedgeduponThursdaydespitegenerallygoodeconomicdataasworriesaboutthetaxbillweighedonsentiment.GlobalFlashPMIdatawasallbetterthanexpected,butSen.Rubio’sannouncementofapotential“no”voteintheafternoonsawstockscomeforsale,andthebenchmarkindexcloseddown0.41%.
TheweaknessonThursdayprovedtobeshort-lived,asstocksroaredbacktohitfreshall-timehighsonFridaythankstoanincreasinglyfavorableoutlookforsuccessfultaxreform.TheS&P500gappedhigherattheopenandcontinuedtochurnhigheroverthecourseoftheday.
EconomicFocus:
PassageofUStaxbillexpectednextweekRepublicanleadersintheUSHouseofRepresentativesandSenatehashedoutacompromisetaxbillthisweek,althoughafewRepublicanSenatorsarestillpushingforadditionalchanges.ThepackageisexpectedtobevotedonintheSenateonTuesdayandintheHouseonWednesdaybeforebeingsignedbyPresidentDonaldTrumponThursday,ifallgoeswellfortheRepublicans.Atthesametime,astop-gapfundingbilltokeepthegovernmentinoperationuntilmid-JanuaryisintheworksandneedstobepassedbyFriday,22Decemberwhenfundingrunsout.ItappearsthatthereisagreementbetweenDemocraticandRepublicanleadersonpassingacontinuingresolutionthatpushesapotentialshutdownintomid-January.
for the week ending December 15th, 2017
Allinvestmentsinvolverisk,includinglossofprincipal.Principalvaluesandinvestmentsreturnsareneitherguaranteednorissuedby,guaranteedby,orobligationsofabank,savingsandloan,orcreditunion;andarenotinsuredorguaranteedbytheFDIC,SIPC,NCUSIForanyotheragency.PortionsofthisnewsletterwaspreparedbyWESherman&Co.,LLC.WESherman&Co.,LLCisnotaffiliatedwithProEquitiesorHarvestInvestmentServices,LLC.AdvisoryServicesoffered
throughHarvestInvestmentServices,LLC,aRegisteredInvestmentAdvisor.SecuritiesofferedthroughProEquities,Inc.ARegisteredBroker-DealerandMemberFINRAandSIPC.HarvestFinancialPlanning,LLCandHarvestInvestmentServices,LLCareindependentofProEquities,Inc
ThisWeekUpcomingEconomicFocus:
Release Date Briefing.comConsensus
BuildingPermits December19th 1280K
MBAMortgageApplications December20th NA
CrudeInventories December20th NA
PhiladelphiaFed December21st 21.0
InitialClaims December21st 236K
PersonalIncome December22nd 0.4%
MichiganSentiment-Final December22nd 97.3
Table1:Briefing.com
EarningsFocus:The3rdQuarter2017earningswithintheS&P500–Ofthe500companiesthathavereportedearningsforthe3rdQuarter2017,72.8%havereportedearningsaboveanalystexpectations.Thisisabovethelong-termaverageof64%andtheaverageoverthepastfourquartersof72%.Furthermore,68.1%ofcompanieshavereportedQ3,2017revenuesabovebothanalystshort-termexpectationsof60%andthelong-termaverageof59%.TheestimatedearningsgrowthratefortheS&P500ofQ3,2017relativetoQ3,2016isexpectedtoincrease8.4%.
Whenyouexaminetheindividualsectors,eightoftheelevensectorsareestimatedtoreportayear-over-yearincreaseinearningsrelativetoQ32016.TheEnergyandInformationTechnologysectorshavethehighestearningsgrowthrateforthequarter,whiletheFinancialsectorhasthelowestanticipatedgrowthcomparedtoQ32016.TheS&P500revenuegrowthrateisestimatedtoincrease5.4%forthequarter.TheEnergysectorisexpectedtohavethehighestestimatedrevenuegrowthratewhiletheUtilitiessectorisexpectedtohavethelowest.Theforwardfour-quarter(4Q17-3Q18)P/EratiooftheS&P500is18.6,inlinewiththefifteen-yearaverage.Thisweek,December18th2017,13oftheS&P500companiesareexpectedtoreportquarterlyearnings.
OtherNews:
US,EUandJapanteamuptocounterChina,othersTheUS,theEUandJapanhaveformedanalliancetofightmarketdistortionscausedbyChina’ssevereexcesscapacity,illegalsubsidiesandintellectualpropertyabuses.ThetreeentitiessaidtheywillworkwithintheWorldTradeOrganizationframeworkandwithothermultilateralgroupstoeliminateunfaircompetitionbyChinaandothercountries.MediareportsindicateJapan,fearfulthattheUSwouldotherwiseactalone,wasthedrivingforceinforgingthecommonstrategy.
ThomsonReuters,FirstTrust,SevensReport&MFS.
Allinvestmentsinvolverisk,includinglossofprincipal.Principalvaluesandinvestmentsreturnsareneitherguaranteednorissuedby,guaranteedby,orobligationsofabank,savingsandloan,orcreditunion;andarenotinsuredorguaranteedbytheFDIC,SIPC,NCUSIForanyotheragency.PortionsofthisnewsletterwaspreparedbyWESherman&Co.,LLC.WESherman&Co.,LLCisnotaffiliatedwithProEquitiesorHarvestInvestmentServices,LLC.AdvisoryServicesoffered
throughHarvestInvestmentServices,LLC,aRegisteredInvestmentAdvisor.SecuritiesofferedthroughProEquities,Inc.ARegisteredBroker-DealerandMemberFINRAandSIPC.HarvestFinancialPlanning,LLCandHarvestInvestmentServices,LLCareindependentofProEquities,Inc
MarketMomentumFocus:OneimportantaspecttotheHarvestFocusisthatitwillprovideyouwithkeyinformationabouthowvarioussectorsandassetclassesaretrendingrelativetooneanotherandalsotothebroadmarket.TheMarketFocuswillhelpyoubetterunderstandthemomentuminvestmentapproachutilizedbytheAlphaSolutionsstrategiesthatweemploytohelpyou“HarvestGainsandLimitLosses”.Itwillalsohelpdemonstrateourrulesbasedinvestmentapproachofwhyspecificpositionswerepurchasedorheldontoandwhyothersweresold.Wehavehighlightedafewofthesignificantchangesfromaweekago.TherewereafewsignificantmovementsintheMajorAssetClassesandSectors,theNASDAQ100movedup8ranking10thandtheTechnologySectormovedup7ranking5th.TheMidCapBlendfell10to13thandtheSmallCapGrowthfell9to18th.
AlphaSolutions13/50ModelUpdate:CurrentHoldings:
Cash 1.0% MoneyMarketMDY 20.0% SPDRS&PMidCap400ETFTrustUnitSer1Standard&PoorsDepositReceiptSPY 20.0% SPDRS&P500ETFTrustTrUnitDIA 20.0% SPDRDowJonesIndustrialAverageETFTrustUnitSer1
QQQ 20.0% PowerSharesQQQTrustUnitSer1IWM 19.0% iSharesTrustRussell2000ETF
Figure2Source:WESherman&Co,LLC
Allinvestmentsinvolverisk,includinglossofprincipal.Principalvaluesandinvestmentsreturnsareneitherguaranteednorissuedby,guaranteedby,orobligationsofabank,savingsandloan,orcreditunion;andarenotinsuredorguaranteedbytheFDIC,SIPC,NCUSIForanyotheragency.PortionsofthisnewsletterwaspreparedbyWESherman&Co.,LLC.WESherman&Co.,LLCisnotaffiliatedwithProEquitiesorHarvestInvestmentServices,LLC.AdvisoryServicesoffered
throughHarvestInvestmentServices,LLC,aRegisteredInvestmentAdvisor.SecuritiesofferedthroughProEquities,Inc.ARegisteredBroker-DealerandMemberFINRAandSIPC.HarvestFinancialPlanning,LLCandHarvestInvestmentServices,LLCareindependentofProEquities,Inc
Figure4Source:WESherman&Co,LLC
TheBigPicture:The“bigpicture”isthemonths-to-yearstimeframe;i.e.,thetimeframeinwhichCyclicalBullsandBearoperate.Belowisasnapshotofthecurrentindicatorstatuseswecloselywatchforbroadmarketdirection:
USBull-BearEquityIndicatorthisweekis82.09;higherthanlastweek‘s80.49.Thisisalongerterm(monthstoyears)indicatorforthemarketdirectionandisusedtoestablishtheequityallocationinmanyofourAlphaSolution’sstrategies.
Figure3Source:WESherman&Co,LLC
Allinvestmentsinvolverisk,includinglossofprincipal.Principalvaluesandinvestmentsreturnsareneitherguaranteednorissuedby,guaranteedby,orobligationsofabank,savingsandloan,orcreditunion;andarenotinsuredorguaranteedbytheFDIC,SIPC,NCUSIForanyotheragency.PortionsofthisnewsletterwaspreparedbyWESherman&Co.,LLC.WESherman&Co.,LLCisnotaffiliatedwithProEquitiesorHarvestInvestmentServices,LLC.AdvisoryServicesoffered
throughHarvestInvestmentServices,LLC,aRegisteredInvestmentAdvisor.SecuritiesofferedthroughProEquities,Inc.ARegisteredBroker-DealerandMemberFINRAandSIPC.HarvestFinancialPlanning,LLCandHarvestInvestmentServices,LLCareindependentofProEquities,Inc
PersonalWealthEnhancerTip:Rememberwhenyouwereakid,thingsweresimple,good,andsecure.Youkeptthingsinabox,butasyougrewolderthenumberofboxesgrewuntilyoucouldnotkeeptrackofeverything.TheQuestionhereisdoyouknowwhereeverythingis,orwhateverythingisworth?Because,ifyoudon’tknowyoushould,andnowyoucanallinoneplaceinsteadofhavingthingstuckedawayinboxesallovertheplace.Youcanhaveasecuredlocationforallyourfinancesandinformationwithdailyupdatesandfinancialactivity.Don’tmakelifedifficultbytryingtodothingsonyourown,butletushelpyouwithanintegratedwebsitethatallowsyoutotakecontrolandfeelateaseknowingwhereallyourboxesare.“Thosewhoknowwhattheyhave,farebetterthanmost.”Clickheretowatchthevideo.
ClickHeretowatchthevideoexplanationoftheAlphaSolutions13/50TrendModelbyHarvest’sManagingDirectorTimNewell.Thevideogivesanexcellentdescriptionofhowthemodelissetupandhowallourmodelsarerulesbasedandwhatkindofprotectiontheycanpotentiallyofferyou.
ForMoreModelInformation:AlphaSolutionsModels
SourcesInclude(butarenotlimitedto):TheShermanReports,SevensReport,FirstTrust,MFS&ThomsonReuters
