After a disastrous month of January; which would have been far worse had Friday’s massive rally not taken place; the month of February got off to a flat start. It is worth noting, though, that yesterday, the stock market opened lower and rallied back into positive territory before finishing mixed.
This week will be another busy one. It began with Alphabet’s (GOOGL) 4th quarter earnings report last evening. It will end with the January jobs report on Friday. In between, there will be a slew of earnings and economic reports to make it interesting. Then of course on Sunday is Super Bowl 50 (I will preview the game at the end of the week, compete with Las Vegas odds)
Alphabet reported results which far exceeded expectations. The stock rose about 4% after hours. Given that stock’s rise and Apple’s (AAPL) pullback, Alphabet is now the world’s most capitalized public company.
It appears that the SPX last week, after rising 1.75%; along with most major US indexes have decoupled from China where the Shanghai Shenzhen CSI 300 Index declined 5.38% last week. On the other hand stocks did not decouple from crude oil which also rallied last week. Perhaps the rally in crude oil was more of a welcome relief to the beaten down energy sector which led the rally in stocks.
The second highest ranking Fed official, Vice Chairman Stanley Fischer, in a speech to the Council on Foreign Relations in New York, once you filter out the academic rhetoric, led the market to interpret that another rate hike is not likely in the cards until later this year or 2017. If only that speech was given in December, we might not have suffered the tumultuous month of January.
Now that perhaps we can take some of the heat from China off the table, with crude oil stabilizing and the Fed beginning to admit that it was too hawkish, the set up for stocks is looking much brighter.
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Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AAPL & GOOGL — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
– Read Scott’s intra-day thoughts and comments on Scutify for which he is a co-founder of its parent company Wall Street All-Stars, LLC
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