Wednesday 6/19/19=DJIA +53 NASDAQ +8
The market was very quiet today as it awaited the fed announcement. After the announcement the market was all over the place. Best Stocks Now had a very good. Best Bonds Now also had a very good day. I looked at several hundred charts during my trading day.
I sent out tweets on the following stocks: LULU, LNTH, IIPR, ESLT, ARQL, AAN, ADBE, SHOP, & VCEL. SHOP was especially impressive today. I remain long in both my Ultra and Premier Growth Portfolios.
Here is what had the markets nervous today.
- U.S. equity index futures entered a holding pattern overnight, steadying before the conclusion of a crucial Fed meeting where investors anticipate policy makers will signal a readiness to lower rates.
- The three major benchmarks, which rallied yesterday to the highest levels since early May, were boosted by a dovish turn from ECB President Mario Draghi, who pledged to restart the bank's €2.6T bond buying program if growth and inflation continued to slow.
- President Trump's "good telephone conversation" and announcement of a G20 meeting with President Xi later this month, subsequently confirmed by Chinese state media, gave markets an extra leg-up.
- Oil is down 0.2% at $54.02/bbl, gold is 0.3% lower at $1346/ounce and the 10-year Treasury yield is up 2 bps to 2.08%.
- Episode 4 of FOMC Season 2019 airs this afternoon (2:00 p.m. ET) and it looks like the Fed is backed into a corner.
- A failure now to suggest a rate cut later this year - or a pivot back to even a neutral stance - could cause a violent selloff by markets.
- But if Jerome Powell does flag the plans, he will be accused of caving to President Trump, who has been relentless in excoriating the Fed and demanding that it reverse rate hikes made last year.
- More drama? Asked by reporters outside the White House yesterday if he wanted to demote Powell, Trump said "let's see what he does."
Canada declares a national climate emergency while they approve an oil pipeline expansion.
- Canada's federal government says it will move ahead with the Trans Mountain pipeline expansion, offering some relief to the country's oil and gas sector constrained by a years-long pipeline bottleneck.
- The government says construction on the project to triple Trans Mountain's capacity to carry 890K bbl/day from Alberta's oil sands to the Pacific Coast will begin this year; Trans Mountain could come online in 2022-23, according to recent estimates.
- The decision is a balancing act by the Trudeau government to both support growth in the fossil fuels industry while also enforcing stricter environmental policies; yesterday, Canada's House of Commons passed a motion to declare a national climate emergency in Canada.
Boeing gets a big order. Airbus is shocked at losing this client.
- Boeing (BA +3.8%) gets a big boost at the Paris Air Show as British Airways owner IAG signed a letter of intent to buy 200 of its 737 MAX aircraft, the first deal for the plane since its grounding in March.
- Airbus (OTCPK:EADSY -0.1%), the current supplier of British Airways, reportedly was stunned by the deal worth $24B at list prices, which came months after it lost a major IAG wide-body aircraft order to the U.S. company; Airbus may not have been offered a chance to bid, Reuters reports, citing industry sources.
- "We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months," IAG CEO Willie Walsh says of the 737 MAX.
- After Boeing ended the initial session of the air show with no new orders, the company earlier announced a commitment from Korean Air to buy 20 787 Dreamliners and Air Lease said it would purchase five 787-9 Dreamliners.
- Shares also likely are benefiting from apparent progress on the trade front with China, as Pres. Trump says he will meet with Pres. Xi at the upcoming G20 summit.
The big move in Facebook takes a pause.
- U.S. lawmakers from both sides of the aisle this afternoon are forming a growing group calling for hearings on Facebook's (NASDAQ:FB) plans for a cryptocurrency.
- Democrat Maxine Waters, chairwoman of the House Financial Services Committee, now says she wants Facebook to testify about the plans and says the company should put them on hold for a review.
- She received a letter from the committee's top Republican, Patrick McHenry, calling for a hearing on the issue: "We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the global financial system.”
- Senate Banking Committee ranking Democrat Sherrod Brown says “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight."
- That's part of a generally negative reaction from other countries to the move.
- Swiss regulators say they're in contact with the initiators of the Libra project. Facebook unveiled its plan for Libra today.
- The company closed down 0.3% during the regular session and is off 0.3% after hours.
Huge demand for high yield these days, even from less than stellar companies.
- Sirius XM (NASDAQ:SIRI) has priced a $1.5B offering of 4.625% senior notes, doubling the planned size of the offering.
- The company earlier planned to offer $750M in senior notes due 2024.
- The offering will now cover $1.5B in 4.625% senior notes due 2024, issued at 100% of principal.
- The upsizing means proceeds will now go toward redeeming all of the company's 6% senior notes due 2024, at 103% of principal along with accrued and unpaid interest.
- Clean Harbors (NYSE:CLH) has priced $845M (from $800M) of senior unsecured notes, consisting of $545M of its 4.875% Senior Notes due 2027 and $300M of its 5.125% Senior Notes due 2029.
- Each series of Notes was priced for purposes of resale at 100.000% of its respective aggregate principal amount.
- The issuance and sale of the Notes is expected to close on or about July 2.
Another small biotech goes public.
- Stoke Therapeutics (STOK) has priced its IPO of 7.89M common shares at $18/share, for gross proceeds of $142M.
- Shares will begin trading on Nasdaq on June 19 under the symbol “STOK.”
- Underwriters over-allotment is an additional 1.18M shares.
- Closing date is June 21.
Nice report and move on one of our biggest holdings at Gunderson Capital.