It was another fascinating week and something to which we have almost become accustomed. Not only did the NASDAQ ($NDX), Dow ($DJI), and S&P500 ($SPX) hit new all-time highs, but there was plenty of political news as well.
First, we saw Sean Spicer, White House Press Secretary, resign from his post and the announcement of multi-millionaire, Wall Street alumnus Anthony Scaramucci as White House communications Director. We saw Senate Republican leader, Mitch McConnell, call for a vote to hold a vote on the repeal of Obamacare. The initial vote was a tie requiring Vice President Pence to break the tie in favor of holding a vote for a “skinny repeal” of Obamacare. When the “skinny repeal” vote was cast on Thursday, every Democratic Senator, along with 3 Republican Senators, voted against the repeal, defeating the measure 49-51. After much lamenting by Republicans and an excoriating tweet storm by President Trump we soon learned of the resignation of White House Chief of Staff Reince Priebus. As the former head of the RNC, many people felt that Mr. Priebus served as an official tie-in for President Trump to the de-facto Republican base. So it was somewhat of a surprise amongst political spectators to find out that Priebus was out and former General, and current Department of Homeland Security Secretary, John Kelly would be taking over as the new White House Chief of Staff.
We then discovered that a US Navy ship fired warning flares at an Iranian vessel and North Korea successfully launched a second Intercontinental Ballistic Missile. However, several market indices reached new all-time highs. We saw a continuation of the Technology Sectors ($XLK) advance led by Facebook Inc.’s ($FB) spectacular earnings. For a very brief period of time, the world had a new richest man as Jeff Bezos, CEO of Amazon, surpassed former Microsoft CEO, Bill Gates. The title was only held for a few short hours as Amazon missed its first quarterly earnings cycle in 2 years.
With all the excitement in the news this week one might have expected a dramatic increase in volatility or dramatic selloff, yet the market seems to have brushed it off.
If the recent political news or just the standard back-and-forth Wall Street commentary has you stressed out then feel free to attend one of our upcoming seminars or reach out to us directly to learn how we can help you protect your assets while meeting your investment objectives.
Major Earnings for the Upcoming Week (tickers are listed with a “$” preceding them) :
Pre-Market – Loews ($L)
Pre-Market – Archers Daniel Midland ($ADM), British Petroleum ($BP), CME Group ($CME), Cummins Inc ($CMI), Pfizer ($PFE), Phillips 66 ($PSX), Royal Caribbean Cruise ($RCL), Under Armour ($UA/UAA), Xerox ($XRX)
After Close – Apple Inc. ($AAPL), Devon Energy Corp ($DVN), FireEye ($FEYE), Papa John’s Pizza ($PZZA)
Pre-Market – Cardinal Healthcare ($CAH), Exelon Corp ($EXC), Humana Healthcare ($HUM), Molson Coors Brewing Co. ($TAP), Mondelez ($MDLZ)
After Close – 3D Systems Inc ($DDD), Fitbit Inc. ($FIT), Marathon Oil ($MRO), MetLife Inc ($MET), Occidental Petroleum ($OXY), Square Inc ($SQ), Take Two Interactive Software ($TTWO), Tesla Motors ($TSLA), Williams Company ($WMB)
Pre-Market – Aetna Inc. ($AET), Allergen Inc. ($AGN), Apache Energy Co. ($APA), Clorox ($CLX), Intercontinental Exchange Inc. ($ICE), Teva Pharmaceuticals ($TEVA), Yum Brands ($YUM)
After Close – Caesar’s Entertainment ($CZR), Fluor Inc. ($FLR), Kraft Heinz Co. ($KHZ), Shake Shack ($SHAK), Viacom Co ($VIAB), Yelp Inc. ($YELP)
Pre-Market – Chicago Board Options Exchange ($CBOE), Cigna Corp ($CI), WellCare Health Plans, Inc. ($WCG)
Economic Releases (7/31– 8/4):
8:45 am CT – Chicago PMI
9:30 am CT – Dallas Fed Mfg. Survey
Auto Sales – All Day
7:30 am CT – Personal Income and Outlays
8:45 am CT – PMI Mfg. Index
9:00 am CT – Construction Spending
6:00 am CT – MBA Mortgage Applications
7:15 am CT – ADP Employment Report
9:30 am CT – Oil Inventories
10:00 am CT – Fed’s Mester Speaks
2:30 pm CT – Fed’s Williams Speaks
7:30 am CT – Weekly Jobless Claims
8:45 am CT – PMI Services Index
9:00 am CT – ISM Non-Mfg. Index
9:00 am CT – Factory Orders
9:30 am CT – Natural Gas Inventories
7:30 am CT – July Jobs Report
7:30 am CT – International Trade
12:00 pm CT – Baker-Hughes Rig Count
Disclaimers and Disclosures
Investing Risks: The risk of loss from investing in securities (stocks, ETFs, mutual funds, etc.), bonds, options, futures, and forex or related products, can be substantial. Investors must consider all relevant risk factors, including their own personal financial situation, before investing.
Investments in bonds and fixed income products are subject to various risks (including liquidity, interest rate, financial, and inflation risks) and special tax liabilities.
Options Risks: Options involve risk and are not suitable for everyone. Options trading privileges are granted at the account level by your custodial broker and are subject to review and approval. Not all account holders will qualify. Before trading options, a person must receive a copy of Characteristics and Risks of Standardized Options. Individuals should not enter into options transactions until they have read and understood the risk disclosure document, Characteristics and Risks of Standardized Options, which can be found on our website www.mscm.net. Copies may be obtained by contacting your broker or the Options Clearing Corporation.
Spreads, Straddles, Strangles, and other multi-leg option strategies can entail substantial transaction costs, including multiple commissions, which may impact any potential return. These are advance option strategies and often involve greater risk, and more complex risk than basic options trades.
Portfolio Margin: A portfolio margin account generally permits greater leverage in an account, and greater leverage has the potential to create greater losses in the event of adverse market movements. Portfolio Margin, or Risk-Based Margin, is a margin methodology that sets margin requirements for an account based on the greatest projected net loss of all positions in a “security class” or “product group” as determined by the custodial broker’s theoretical pricing model using multiple pricing scenarios. These pricing scenarios are designed to measure the theoretical loss of the positions given changes in both the underlying price and implied volatility inputs to the model. Clients participating in portfolio margin will be required to sign an agreement acknowledging that their security positions and property in the portfolio margin account will be subject to the client protection provisions of Rule 15c-3 under the Securities Exchange Act of 1934 and the Securities Investor Protection Act. Clients will be subject to minimum equity requirements by not only the custodial broker but also the managing firm.
General Disclosures: Any strategies discussed in this presentation, including examples using actual securities and price data, are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell specific securities or strategies.
Investors should carefully consider the investment objectives, risks, charges, and expenses before investing in any investment product. To obtain a prospectus containing this type of information as well as other important information, contact your custodial broker. Please read the prospectus carefully before investing.
You should discuss any/all implications of investing in such products with your custodial broker, financial adviser/advisor, and/or tax advisor. Past performance is not indicative of future results.
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