Tax Cuts Send Markets Higher, Flynn to Testify Against Trump and OPEC Extension
This week the stock market broke to new record highs four out of five days.
Buyers were pouring into the markets on the belief that tax cuts were finally coming after the Senate Budget Committee made a motion to move the bill to the Senate floor.
Most of the gains came on Tuesday and Thursday during the week.
The chart below shows a daily break down of last week’s movement in the SP500 stock market.
SP500 stocks rallied almost 2.1% into Thursday, before temporarily erasing all weekly gains on the Michael Flynn news (more in the next section).
Weekly Markets & Stock Sector Overview
Top Chart – Sectors Overview
- Financials up 4.99%
- Retail is up 3.64%
- Energy markets up 3.12%
- Utilities up 1.02%
- Technology is down 1.31%
Bottom Chart – Markets Overview
- SP500 up 1.58%
- US Dollar up 0.12%
- Gold is down 0.33%
- Oil is down 0.93%
Michael Flynn Bombshell Sends &P500 1.7% Lower
On Friday at 11:09 AM we got the word in our live trading news feed that Michael Flynn would be willing to testify against President Trump.
This sent a massive wave of fear into the stock market. Traders and investors alike started to think about treason and potential impeachment.
In our trading room, we did not hesitate to short into the big sell-off, and many members capitalized big.
If you are trading without a news feed, you need to read the best news feeds for day traders here >
The news broke from ABC’s Brian Ross and was not an accurate depiction of the situation. Shortly after this bombshell report, NBC stated that the senior official was actually Jared Kushner, Trump’s son in law, and not Trump himself
Brian Ross was suspended by ABC and eventually, equities rallied back up during the afternoon after bottoming out into the European market close.
Here is a look at a 5-minute chart of the day’s price action:
But if you got stopped out on this trade, there is good news… Trump has a suggestion for you:
People who lost money when the Stock Market went down 350 points based on the False and Dishonest reporting of Brian Ross of @ABC News (he has been suspended), should consider hiring a lawyer and suing ABC for the damages this bad reporting has caused – many millions of dollars!
— Donald J. Trump (@realDonaldTrump) December 3, 2017
Mid-Week Rotation Out of Tech Stocks
On Wednesday we saw a pretty large downswing in Nasdaq and the technology sector.
Nasdaq dropped over 1% as the SP500 and other markets held firm and even moved to fresh highs.
The downside happened on heavy volume, indicating that smart money was rotating out of tech names.
Facebook, Amazon, Apple, Netflix, and Google (FAANG stocks) were hit particularly hard all week and closed near lows on Friday.
FAANG finished the week down 4%.
Netflix was particularly week and led the weakness overall. Facebook was right there along with Google.
Amazon and Apple were the strongest of the group as they saw support from holiday purchasing optimism.
OPEC Agrees to 9-Month Extension as Expected
Oil prices traced lower into Thursday’s big OPEC meeting.
In our FREE Morning Market Update on YouTube, we talked about all the possible scenarios and which one was most likely.
If you missed it, watch it here.
Traders expected OPEC and Non-OPEC producers to come to an agreement on a 9-month extension on production cuts at the current level. Ultimately the deal is now effective until the end of 2018.
Nigeria and Libya are also joining in on the deal starting in January of 2018, but their output is very small relative to other nations.
Overall after some volatility, oil finished the week about $1 off highs.
After dropping over 3.57% by Wednesday, oil prices bottomed out early on in the US session Thursday.
By Friday’s close, oil prices erased most losses but gave up some gains to close the entire week down 1.02%.
Weekly Economic News Calendar – Jobs Week
This week traders are looking for more updates on the GOP tax bill. Equities are really moving on the hype and excitement of this passed tax legislation, primarily the Russell 2000 stocks.
Wednesday we will see an early look at the ADP Non-Farm numbers, which are used to gauge the strength of the more important report on Friday. We will also see the Bank of Canada rate statement, which is expected to stay unchanged at 1%. They surprised with a hike last time around, and so traders are expecting anything in the real of possibilities.
Thursday we get a look at the latest Unemployment Claims and an update from the European Central Banks’ (ECB) Mario Draghi.
Friday we close out the week with the all-important Jobs report at 8:30 AM. This report is vital because it is the last look at employment data before the upcoming Federal Reserve meeting, at which they are expected to hike rates by 0.25%.
That’s all for this week.
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