• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Energy

Rev's Forum: The Fed Isn't Convinced the Trump Rally Is Justified

Its members are skeptical about the market celebration and are not going to commit to a course of rate hikes until they have more data.
By JAMES "REV SHARK" DEPORRE
Jan 05, 2017 | 07:21 AM EST
Stocks quotes in this article: M, KSS, AKAO, SRPT, GBT, NVDA

"... the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years."

--Minutes of the Fed Meeting, Dec. 13-14, 2016

After a weak finish to 2016, many bears were looking for a poor start to 2017. They were caught by surprise by a gap-up open on Jan. 2 and then were squeezed higher on Wednesday as underinvested bulls chased entry points. Breadth was extremely strong, with biotechnology and oil-related stocks leading the charge.

Minutes of the last Fed meeting were released yesterday and had little impact on the market at first, but this morning the headlines are about Fed members' discussion of the impact of Trump fiscal policies. While Fed members believe Trump may have a positive impact on growth, they are skeptical about the market celebration and are not going to commit to a course of rate hikes until they have more data.

The noncommittal Fed is causing some pressure on the dollar, and that is being amplified by the biggest two-day rally on record for the Chinese yuan. China is working hard to prop up its currency in order to stop the flow of currency out of the country. By keeping the yuan strong it makes it unattractive to convert into other currencies.

It is currencies that are the main driving force this morning, but poor news in retail from Macy's (M) and Kohl's (KSS)  (which is part of the Dividend Stock Advisor portfolio) is putting severe pressure on retail. Retail and restaurants have been struggling lately and are causing concern about the health of the consumer. Consumer sentiment has been quite good, but it isn't reflected in certain areas of the economy.

The bears, who always tend to be overly anticipatory, now are looking for a market top later this month. They theorize that the inauguration could be a "sell the news" event. Also we have earnings season coming up very quickly and that may temper some of the recent optimism when there are some cold, hard numbers to evaluate.

I am a bit concerned about how frothy the action was yesterday, but I'm finding that themes are working. Yesterday it was biotechnology with some things such as Achagoen (AKAO) , Sarepta Therapeutics (SRPT) and Global Blood Therapeutics (GBT) working well. Precious metals are a theme today that may work on currencies and there are some individual movers such as Nvidia (NVDA) that offer opportunistic trades.

The arguments for a market top aren't easy to see, but the opportunities to make money are still on the long side. Stay focused on price action and it will alert us when a turn is coming.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long AKAO, SRPT, GBT and NVDA.

TAGS: Investing | U.S. Equity | Healthcare | Financial Services | Energy | Basic Materials | Consumer Discretionary | Currencies | Markets | China | How-to | Stocks

More from Energy

The Pendulum Swings Back, but Don't Look for Things to Stabilize

Peter Tchir
Aug 15, 2022 11:00 AM EDT

It could swing past the point where things look normal or OK to a point where things look bad again.

Where Are Crude Prices Heading, and Could They Clog Up a Recovery?

Bruce Kamich
Aug 12, 2022 11:00 AM EDT

Let's check the charts to see where we can expect oil prices to flow.

PPI Cools, Home Prices Don't, Fed in the Dark, Technical Battle Lines, Chevron

Stephen Guilfoyle
Aug 12, 2022 7:29 AM EDT

Just when is the Federal Reserve going to reduce the cash slosh, anyway?

This New Energy Fund Sounds Dirty, But Could Help Investors Clean Up

Mark Abssy
Aug 11, 2022 1:33 PM EDT

The Strive U.S. Energy exchange-traded fund is billed as an anti-ESG ETF. Let's see how it stacks up against the similar Energy Select SPDR Fund.

CorEnergy Is a Pipeline to High Yield

Jim Collins
Aug 11, 2022 1:15 PM EDT

It's the best of both worlds, a hydrocarbon company that also has a green component.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:24 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    To Improve Your Trading and Investing, Spend More ...
  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login