Your Thursday Market Blip 2/15/18

Your Thursday Market Blip 2/15/18

Stocks moved higher as recovery from the selloff continues. The gurus say the selloff was not “fundamental” rather it was based on sentiment and “technicals”. An analogy would be if you own a house. The fundamentals of your house are the roof, foundation and walls. The “technical” part of your house is what the price of it is on the real-estate market which constantly moves up and down. The current market fundamentals ie earnings, dividends and GDP growth are in good shape. The “technicals” however are moving up and down based on fears about inflation, interest rates and bets on volatility by traders in Chi-town at the CME fishing for roll yield on the smile curve.

The Dow closed the day up 306 at 25,200. Trading volume was down a bit.

Cisco Systems reported earnings yesterday with revenue up 3% and net profits up 11%. The company is currently transitioning to a subscription based sales model which is starting to bear fruit. Cisco also announced it was repatriating $67 billion in wampum from overseas accounts which is one of the largest repatriation plans yet revealed. The company also announced a 14% dividend hike and a $24 billion share buyback program. Wall Street liked the idea and sent shares higher.

As interest and mortgage rates are creeping higher the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) remained at a reading of 72 up from 65 last year at this time. The builders are excited about tax cuts and said pro-business regulatory reforms are nailing it in terms of strengthen the housing market, supporting overall economic growth and offsetting issues like rising lumber prices and tight supplies of labor and land. Housing is all about the “3 L’s”. (Labor, Land and Lumber).