USIR Weekly Update Hotline
For Monday, July 17, 2017
Wishful Thinking or Wish Come
Stocks rallied across
the board last week, not just the big cap techs. In the wake of the July
Fourth holiday, the S&P 500 hit a new record high. The Nasdaq Composite that
was battered last month rebounded close to its early-June peak. Both indexes
now trade well above their ten-week moving averages.
Hopes are high that the current
round of second-quarter earnings reports how underway will be very strong and
drive stocks higher. That the Big Techs that were the only gainers during the
spring are now on the rise from bargain prices. That the Fed wont lift
interest rates as fast as many fear. Some investors even harbor hopes that the
embattled White House can somehow deliver on at least some of its president's overblown
Yet last weeks sharp price gains
came on weak, below-average trading volumenot a bullish sign. Hopefully its
just the markets usual summer doldrums setting in. However, oil prices appear
to be headed ominously lower. Geopolitical threats abound, at home and abroad. Stock
price valuations remain elevated above historical norms, as noted in our just-released
July 15 issue.
One normally bullish commentator
warns investors to beware of the markets long and eerie ascent since last
Our current bottom line: We foresee neither an economic
downturn nor an outbreak of the inflation that concerns the Fed. Nor do we foresee
a steep 5%-to-10% stock market correction. But the buying opportunities we do
expect are primarily technology-drivenin sectors and product niches where
rapid revenue and earnings growth offer the most reliable and enduring support
for todays still-elevated share prices.
For further details about our
stock picks and portfolios click to our newly-posted July 15 Issue.
Stephen W. Quickel,