The much-anticipated earnings from Action Alerts PLUS holding Wells Fargo (WFC) , JPMorgan Chase (JPM) and Bank of America (BAC) were decent but not good enough given the run the financial stocks have enjoyed since PEOTUS Trump won the election. Having said that, I am not backing off my call that the financial sector will enjoy a good 2017 despite the "disappointment" yesterday when the three biggies reported their numbers for the fourth quarter. As most investors in the sector saw, the reaction to their respective earnings was rather muted. However, given the terrific run, that is more than likely a great thing all said and done ... if one can look past the day the three banks reported earnings, that is.
To add to the tepid earnings from the financials, we also had retail sales data for December that missed expectations, taking that sector down yesterday as well pushing the Dow into the red shortly after midday, although the Nasdaq hit another record high during the day thanks to Action Alerts PLUS holding Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Action Alerts PLUS holding Alphabet (Google) (GOOGL) .
Speaking about the FANG names, there is a lot of shouting about how these names are running away and need to come down to Earth and all that incessant "noise" from the good guys (missed the run more than likely) and the dark side as well (obvious self-interest). However, since the closing price the day of the election, Nov. 8, Alphabet is up a whopping 2% to date. Netflix is up 7% and if one discounts the 3% gain just yesterday alone, it's up 4%. Amazon and Facebook are up 4%. So, don't drink the Kool-Aid, or maybe the opposite of the Kool-Aid, when you hear about how fast and furious FANG stocks have run. It's just not true, mon ami.
Next week brings us head-long into earnings season and we start the week with earnings from Morgan Stanley (MS) and UnitedHealth (UNH) on Tuesday, Action Alerts PLUS holding Citigroup (C) , Goldman Sachs (GS) and Netflix on Wednesday, Bank of New York Mellon (BK) , KeyCorp (KEY) , American Express (AXP) , IBM (IBM) and Skyworks Solutions (SWKS) on Thursday and Action Alerts PLUS holding General Electric (GE) and SunTrust Banks (STI) on Friday to close out our holiday shortened week.
We also have the usual parade of Fed speakers with William Dudley at 8:45 a.m. EST and John Williams at 6:00 p.m. EST on Tuesday, Neel Kashkari, Minneapolis Fed president, at 10 a.m. EST on Wednesday, John Williams at 10:00 a.m. EST on Thursday and Patrick Harker at 9 a.m. EST and John Williams at 1 p.m. on Friday.
On the economic data front here at home, we have Empire manufacturing on Tuesday, CPI and industrial production on Wednesday, jobless claims, Philly Fed outlook and Bloomberg consumer comfort on Thursday. On Friday we get a break with no economic data of note.
On the international economic data front we Japanese IP data on Monday, U.K. CPI and PPI data on Tuesday, German and eurozone CPI on Wednesday, Chinese IP and retail sales on Thursday and German PPI and U.K. retail sales on Friday.
A full plate any way one chooses to see it.
On the lighter side:
Remember the First Law of Economics: For every economist, there is an equal and opposite economist -- so for every bullish economist, there is a bearish one. The Second Law of Economics: They are both likely to be wrong!
With that, I wish each and every one of you a safe and joyful (long) weekend with your loved ones. Thanks as always for reading my articles.