A very happy Manic Monday to you all. The trading week got off to a roaring start, as the Dow jumps nearly 300 points to close on today. The blue-chip average gained more than 298 points and closed above 25,000 for the first time since mid-March, with 28 of the 30 stocks in the index sporting gains. Aircraft maker Boeing and Caterpillar, which makes heavy earth-moving equipment, led the Dow higher with gains of 3.6% and 2.1%, respectively.
What really spark the rally is the news of the weekend of China and the United States getting closer avoiding a trade war. As the world’s two most leading economic powers any avoidance of devastating protectionist laws is seems are a positive thing in the market these days. But until officially an agreement is reach I suspect that we will continue to see huge swings up and down in the market in regards to these trade negotiations.
The House set to approve bank deregulation legislation. Smaller banks to be exempted from curbs on speculative trading and all banks will get proprietary trade reporting relief. The Treasury Department called for changes to the Volcker Rule when it released a series of reports last year on ways to simplify complex rules affecting the financial system. This could be seen as the beginning of the end of the Dodd-Frank laws first applied after the financial crisis.
Financial banks have been crying over the last decade that there is too much regulation in the financial markets, hindering their ability to offer competitive profits to their shareholders. Now they appear to be starting to get their lobbying monies worth. If regulation does start to happen banking stocks would be an attractive investment for those looking for big profits and a steady dividends. This is definitely a industry that we should keep a close attention to.
If you’re a motorist like me I’m sure you’ve noticed the uptick in gas prices lately. Rising oil prices have also grounded U.S. airline stocks; possibly make them cheap securities to get into.
Just since mid-March, the S&P 1500 airlines index. SPCOMALI has tumbled more than 10 percent. While other factors, including broader market volatility, are weighing on the shares, the decline has coincided with an 18 percent rise in U.S. crude oil prices to over $70 a barrel. With the summer months poised to see no decline in oil prices anytime soon this could be the perfect storm for a buying spree in domestic and international airlines.
Information from this weekly email is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for analysis purposes only. Be sure to understand all risks involved with each strategy, before attempting to place any trade.
Per usual hope you all have a great and prosperous week and an even better investment week. I’ll be talking with you all soon. Happy Memorial Day