Stocks Continue To Cheer Tax Deal

Hey everybody, Dave Bartosiak here for fellow Marquette alum Jim “Jimmy G” Giaquinto. He’ll be back with you tomorrow.

Another day, another dollar in the markets today as the tax overhaul on Capitol Hill hit the history books. We are beginning to see estimates coming in from Wall Street firms trying to gauge the impact of the cuts. Already, there have been a few announcements from companies like AT&T (NYSE:T) saying that they are passing out bonuses based on the tax cuts. If you’re looking for some wage push inflation, perhaps this is the start.

The rally today started in the morning and slowed into the closing with the mega caps of the Dow leading the way. The Dow added 55.64 points or 23 bps at 24,782.29. The S&P 500 was up 5.32 points good for 20 bps at 2,684.57. The NASDAQ traded sideways, adding just 4.4 points or 6 bps at 6,965.36.

Today’s Highlights:

Kevin Matras rang the register on his Landstar trade in Options Trader. He pulled the trigger on closing out the Jan $95 Call, more than doubling up on the trade, rocking out for 110% gain. Despite still being bullish on the trade, he took the huge victory.

“I still like LSTR. But for now, we have more than doubled our premium, and with only 28 days left until expiration, it's time to pull those profits off the table. I see myself repositioning in this one soon. Either on an upside breakout or a pullback. Stay tuned. But for now let's take our profit.”

Tracey Ryniec wants you to remember that the Santa Claus Rally period hasn’t even hit the market yet, despite us rallying so much recently. In her Insider Trader today she wrote, “With the 3-day Christmas holiday now looming, I'm expecting stock traders to take tomorrow off. It should be a low volume trading session. Congress also passed a funding bill to keep the government open into January, which also should take away any surprises tomorrow.

Remember, the Santa Claus Rally officially begins next week. It is the week in between Christmas and New Years as well as the first two trading days of the new year.”

Another theme in Tracey’s write-up, the impact of a surging energy sector, was echoed by Jeremy Mullin in Counterstrike today. Commenting on crude, Jeremy said, "Energy stocks continue to impress while crude oil just sits at $58 a barrel. I think the smart money is preparing for a big year in the energy space in 2018. They are already buying the stocks, crude oil over $60 will help the momentum continue. Once again, ETFs XLE (NYSE:XLE) and XOP ripped higher, both seeing moves over 2%. Luckily we got some exposure in the space last week with COP, which was up 3% today.”

Small cap energy is a great place to be in order to benefit from the tax bill. Domestic producers will likely be one of the largest beneficiaries of the deal.

That’s all I’ve got for you folks today. Jim will be back with you folks tomorrow. Remember, the market closes early in observance of Christmas, while Monday there will be no trading in equities.

Have a great night,

Dave

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