Trump Earns High Marks


  • President Donald Trump deserves “high marks” for his pro-growth policies, including the recently passed tax code, UBS says
  • Trump’s tax reform and de-regulation plans could help to make the U.S. a friendlier place for investors, the bank says at its client gathering in Singapore
  • Despite that, a protectionist U.S. and any conflict the country has with North Korea could derail the current “Goldilocks” environment, says UBS

More:    Those efforts in making the U.S. a more business-friendly economy, which include the recently passed tax reform, are often under-appreciated, said Mike Ryan, UBS Wealth Management’s chief investment officer for Americas. But the president has “changed the perception of what’s possible in Washington,” he said at the bank’s client gathering in Singapore.

“I think prior to his election, the prospects of tax reform, of regulatory relief, or any sort of sensible approach to infrastructure were off the table,” said Ryan, who added that Trump defied those expectations by getting the new tax bill passed.

 The president deserves “high marks” for his economic achievements so far, Ryan added.

Before the bill was passed in December 2017, the U.S. tax code was “very inefficient,” he said. Heavy regulation in the U.S. that businesses faced was also not an environment that gives confidence to investors, he added.

The reform, which drastically cuts corporate tax rate to 21 percent from 35 percent, was therefore a positive development even as the new tax code is “not everything that we hoped for,” Ryan said.

Rollbacks Matter

Hat tip

Socialism Sucks


Great article from The FederalistWhy Socialism Fails

The lede:  As the collapse of the Soviet Union approached, Francis Fukuyama proclaimed the victory of liberal democracy over planned socialism in his 1989 essay, “The End of History?” More than a quarter century later, the USSR has indeed disintegrated. Its former east European empire lies inside the European Union. China has a market economy, though the nation is led by a single party. And the “socialist” states of North Korea, Cuba, and Venezuela are in economic ruin.  Few now advocate “back to the USSR.” At the same time, many people still consider socialism an appealing economic system. Consider, for example, that Bernie Sanders—an avowed supporter of a socialist United States—is America’s most popular politician—and that as many millennials favor socialism as capitalism.

Read the whole

INTC (Weekly)


After A Full Year Without A 5% Correction, What’s Next?

In one word, volatility.

Ryan Detrick with the details:  We looked at all the times the S&P 500 Index didn’t pullback 5% and found the average correction the next year is 12%.  There is also a big jump in 1% daily changes, but also tends to be higher when all is said and done.


Hat tip LPLResearch



Trickle Down

Wal-Mart Raises Hourly Wages in Wake of Tax Reform

The lede:

Wal-Mart Stores Inc. is boosting its starting hourly wage to $11 and delivering bonuses to employees, capitalizing on the U.S. tax overhaul to stay competitive in a tightening labor market.


The increase takes effect next month and will cost $300 million on top of wage hikes that were already planned, the world’s largest retailer said Thursday. The one-time bonus of up to $1,000 is based on seniority and will amount to an additional $400 million. The company is also expanding its maternity and parental leave policy and adding an adoption benefit.
“Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.,” Chief Executive Officer Doug McMillon said in the statement.

This is what ‘trickle down’ looks like.  For decades liberals/democrats have blasted trickle down theory as fake science without any push back.  The theory was always valid, it just didn’t fit the narrative.  No matter how hard the MSM tries to ignore it a vast number of millennials will now see it first hand.  Wal-Mart is not the only company ‘spreading the wealth’ around.  Can you imagine all the head scratching going on inside the economics departments at the elite universities?


What is the ‘Trickle-Down Theory’

Trickle-down economics, or “trickle-down theory,” argues for income and capital gains tax breaks or other financial benefits to large businesses, investors and entrepreneurs in order to stimulate economic growth. The argument hinges on two assumptions: all members of society benefit from growth; and growth is most likely to come from those with the resources and skills to increase productive output.

More on Wal-Mart here:

Kinder Morgan Ready To Cruise?


KMI is on the brink of a breakout.  Once the 200 day moving average, which capped a powerful post earnings breakout back in July, is cleared the stock could be on its way.  KMI is battling the 200 day again this week.  A key level to watch in the near term is $18.70.  A close back below this area would indicate the declining 200 day is still in control of the action.  Over in optionland, a rally is expected.  Bob von Halle has some color:    Very large trade in KMI…..22,000 Jan 19.5 calls were bought for $.11 with the stock at $18.90. Although not technically an MLP, it is often compared to its brethren in that space given its similar business model. That would represent a 3%+ move by next Friday’s expiration date. The sector ETF, AMLP has been quite strong, along with the rest of the energy sector this year. The trader might be expecting a bit of catch up in this name over the next few trading days. I am long the March 20 calls for $.25 which were also modestly active this morning prior to this large trade.

At time of publication we do not have a position in KMI equity.




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The Long View


Bond yields have been in a downtrend for over 30 years.  Is it about to end?  It will be a big story in 2018.

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