“The two most powerful warriors are patience and time.” – Leo Tolstoy

1. Trump Signed Executive Order to Renegotiate NAFTA and Intent to Leave TPP — President Donald Trump signed an executive order formally withdrawing the United States from the 12-nation Trans-Pacific Partnership trade deal. In an Oval Office ceremony, Trump also signed an order imposing a federal hiring freeze and a directive banning U.S. non-governmental organizations receive federal funding from providing abortions abroad. Trump is also looking to begin NAFTA negotiations with Canadian Prime Minister Justin Trudeau.
2. Dow Crosses 20,000 — the Dow took almost 103 years to reach 10,000 in March 1999, and another 17 years to double to reach 20,000. However, the last 1,000 points to reach the 20,000 milestone took just 42 trading days. The blue-chip index has been propelled by President Trump’s moves to promote infrastructure projects and cut regulation, while recording the all-time high during his first week in office. As a whole, the U.S. stock market has gained $2T in wealth since Election Day.
3. Mexico’s President Cancel Meeting With Trump — Mexican President Enrique Pena Nieto canceled his meeting with Trump after he formally announced plans to build a border wall. The U.S. President also slashed funding to so-called sanctuary cities in the start of a strategy to tighten immigration controls. Construction of the wall will begin within “months,” according to Trump, stating Mexico would reimburse the U.S. for the cost “100%.”. President Trump also impose a temporary ban as early as today on virtually all refugee admissions to the U.S. from “countries that have tremendous terror.” “Our country has enough problems without allowing people to come in who, in many cases or in some cases, are looking to do tremendous destruction,”.
4. 4Q GDP U.S. Growth Cools on Trade Drag as Business Spending Rises — Gross domestic product, the value of all goods and services produced, rose at a 1.9 percent annualized rate following the prior quarter’s 3.5 percent gain that was the largest increase in two years, Commerce Department reported. The results cap growth of 1.9 percent for the full year and reinforce the leading role of household purchases while showing that businesses are starting to spend again. The strong job market and optimism among consumers and companies for President Donald Trump’s policies are likely to keep growth humming along in 2017, though tensions over trade could temper any gains.
5. AAII Bullish Sentiment — last week’s AAII bullish sentiment figures, which showed that bullish sentiment fell by roughly five points (37.01% to 31.58%) for the second five-point decline in the last two weeks. That has not happened since May 2016 right before the S&P 500 (SPX/2294.69) fell 6.0%. Jeffrey Hirsch, editor at Stock Trader’s Almanac noted:
“Since 1950, January S&P 500 gains of 2% or more corrected or consolidated in February 62.1% of the time. In the 20 years that the S&P 500 gained 4% or more in January, 65.0% of the time the S&P declined or finished flat (less than 1% gain) in February.”

The week ahead — Economic data from Econoday.com:

“Change is the law of life. And those who look only to the past or present are certain to miss the future” — John F. Kennedy.

1. Britain ‘s PM May Sets Out Brexit Vision With Pledge to Quit EU Single Market — Britain will not seek a Brexit deal that leaves it “half in, half out” of the EU, Prime Minister Theresa May said in a speech outlining her 12 priorities for upcoming divorce talks with the bloc. Those will likely include leaving the EU’s single market and regaining full control of Britain’s borders. May said she wanted an agreement about the nature of the future relationship with the EU by the time the Article 50 exit negotiation process completes in early 2019. That would be followed by “a phased process of implementation, in which both Britain and the EU institutions and member states prepare for the new arrangements.”
2. Trump Vows Health ‘Insurance For Everybody’ — Trump has pledged to provide “insurance to everybody” under his plan to replace Obamacare, The Washington Post reported. He also promised to force pharmaceutical companies to directly negotiate drug prices with the government for Medicare and Medicaid, stating “they’re politically protected, but not anymore.”
3. Amazon Patents Autonomous Vehicle Lane Assignment System — Amazon (AMZN) recently filed a new patent designed to help self-driving vehicles identify the driving lanes best-suited for their individual needs based on things like speed and destination, or time of day and traffic flow. The new system could also help autonomous cars spot reversible lanes, which let vehicles travel in either direction depending on the displayed overhead signal.
4. Turkcell Tests 5G Mobile Internet with Ericsson — 5G mobile internet technology marks the beginning of the “fourth industrial revolution,” Turkcell (NYSE:TKC) CEO Kaan Terzioglu told CNBC. He also said the telecom completed a test in partnership with Ericsson (NASDAQ:ERIC) this past week, using the next-generation internet. 5G is largely viewed as a medium that can support the industrial and “Internet of Things” space, while 4G revolutionized the consumer market.
5. Donald Trump Sworned In As 45th president, Promising ‘Only America First’ — Donald Trump was sworn in as the 45th president of the United States and delivered a fiery attack on the Washington establishment. Trump’s speech was aimed squarely at supporters who felt aggrieved and overlooked during the Barack Obama presidency. With Obama sitting steps away, he described an America riven by crime and social tumult. Trump pledged that U.S. interests would be at the center of his presidency, even at the expense of longstanding foreign relationships.

The week ahead — Economic data from Econoday.com:

“A 60:40 allocation to passive long-only equities and bonds has been a great proposition for the last 35 years,” …”We are profoundly worried that this could be a risky allocation over the next 10.” — Sanford C. Bernstein & Company Analysts on Diversification

1. China Forex Reserves Drop To The Lowest Level Since March 2011 — China’s foreign exchange reserves fell for the sixth the consecutive month in December, but held just above the critical $3T level, as authorities stepped in to support the weakening yuan. According to PBOC data, the world’s largest stockpile of foreign currency plunged by $41.08B to $3.01T, the lowest level since March 2011.
2. Self-Driving Cars Are a Focus for Major Auto Makers — self-driving cars are a big theme at the North American International Auto Show, which kicked off late last week in Detroit. Alphabet’s (GOOG, GOOGL) Waymo revealed that it has built all of its sensor hardware in-house and was ready to offer its autonomous-drive technology in “millions” of vehicles at a competitive price. A package of LIDAR sensors and radar, which used to run approximately $75,000 a few years ago, has fallen by more than 90%.
3. Oil Discoveries Seen Recovering After Crashing to 65-Year Low — oil companies found only 3.7 billion barrels of so-called conventional crude in 2016, 14 percent less than the previous year and the lowest amount since 1952, according to Bloomberg. Oil companies reduced spending on exploration to about $40 billion last year from $100 billion in 2014, and could invest as little as $35 billion this year. Lower budgets meant fewer wells drilled: 431 in 2016, or about a third of the activity two years earlier. Total expenditure on exploration could rise to $40 billion to $45 billion in 2018 and further in 2019 if the oil price recovery endures.
4. Apple Sets Its Sights on Hollywood With Plans for Original Content — WSJ reported that Apple is planning to build a significant new business in original television shows and movies, in a move that could make it a bigger player in Hollywood and offset slowing sales of iPhones and iPads. Programming would be available to subscribers of Apple Music (NASDAQ:AAPL), which already includes a limited number of documentary-style segments on musicians, but nothing like the premium programming the company is now seeking.
5. Trans Mountain Pipeline Expansion Gets Approval from British Columbia — British Columbia has given the green light to Kinder Morgan’s (NYSE:KMI) plan to nearly triple its Trans Mountain oil pipeline, which runs from Canada’s oil sands through the province to a marine terminal on the Pacific Coast. The federal government approved the $6.8B expansion in November after the National Energy Board recommended moving ahead with the project based on the fulfillment of 157 conditions.
6. Stocks Market May Weaken After Trump Swearing-in Ceremony — based on historical records, the market rally that has followed a new President election victory has already factored in potential upside, leaving the market ripe for at least a near-term downturn. In post-inauguration, stock-market performance since Dwight D. Eisenhower’s first oath of office in 1953 found that the S&P 500 (SPX) index, +0.17% or its predecessor, the index actually tended to strengthen in the two weeks after a new term had begun. However, the one-month return has tended to be negative for the last 11 Republican inaugurations (see charts below)

The week ahead — Economic data from Econoday.com:

“It’s what you learn after you know it all that counts.” — Earl Weaver

1. OPEC Starts Oil Production Cuts — the official start of the deal agreed by OPEC and non-OPEC member countries in November begin in Jan. 1, 2017 to reduce production by almost 1.8M barrels per day. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10.
2. Ford Details EV Plans, Cancels Mexico Plant Project — by canceling plans to build a new $1.6B plant in Mexico, Ford (NYSE:F) said it will invest $700M in Michigan instead. Michigan plant will create 700 new U.S. jobs. CEO Mark Fields said the investment is a “vote of confidence” in the pro-business environment being created by Donald Trump, but stressed Ford didn’t cut a special deal with the President-elect. The automaker was a frequent target of Trump’s election campaign for its “south of the border” manufacturing and payment of low tariffs.
3. Retail Names Warnings Of Weak Christmas Sales from Macy’s and Kohl’s — the retail sector is on watch after Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) cut earnings estimates due to weak holiday sales. Macy’s also added details on its previous announcement to close 100 stores, saying the moves will result in 10K job cuts and a $575M reduction in 2017 sales. Department store names Nordstrom (NYSE:JWN), J.C. Penney (NYSE:JCP), Dillard’s (NYSE:DDS) and Sears Holdings (NASDAQ:SHLD) are all lower premarket, while Coach (NYSE:COH), Michael Kors (NYSE:KORS), Kate Spade (NYSE:KATE), Target (NYSE:TGT) and Ross Stores (NASDAQ:ROST) could also see selling pressure.
4. China’s Central Bank Lifted the Exchange Rate Against the USD — China’s central bank lifted the exchange rate against the greenback by the most since 2005, stepping up efforts to support the currency amid concerns over capital outflows from the world’s second-largest economy. The PBOC set the official midpoint for the yuan at 6.8668 per dollar prior to the market opening, 639 pips or 0.9% firmer.

The week ahead — Economic data from Econoday.com:

”Money cannot consistently be made trading every day or every week during the year” – Jesse Livermore

HAPPY NEW YEAR & WISHING YOU A PROSPEROUS 2017

1. Tesla to Manufacture Solar Cells in Buffalo NY — as part of a solar partnership first announced in October, Panasonic (OTCPK:PCRFY) and Tesla Motors (NASDAQ:TSLA) have agreed to begin production of photovoltaic cells and modules at a factory in Buffalo, New York. The two companies plan to start manufacturing in the summer of 2017 and increase to one gigawatt of module production by 2019.
2. Qualcomm Hit With Antitrust Fine In South Korea — the Korea Fair Trade Commission has fined Qualcomm (NASDAQ:QCOM) 1.03T won ($854M) for what it called unfair business practices in patent licensing and modem chip sales. Qualcomm said it would challenge the antitrust regulator’s decision in the Seoul High Court. The fine is the largest ever levied in South Korea.
3. Ford to Triple Size of Autonomous Test Fleet — it’s been three years since Ford (NYSE:F) launched its fleet of 10 first-generation Fusion Hybrid autonomous research vehicles, which have seen advancements like driving on snow-covered roads and operating in the dark without headlights. Joining the team in 2017 will be 20 next-generation autos (featuring new hardware, electrical controls and sensor technology) that will triple the Blue Oval’s stable of self-driving vehicles.
4. Twitter Starts 360-Degree Live Video Streaming — Twitter (NYSE:TWTR) has joined YouTube (GOOG, GOOGL), Facebook (NASDAQ:FB) and others in offering panoramic live views, marking a greater use of real-time video that is part of a broader trend of immersive experiences and virtual reality. Twitter (NYSE:TWTR) has joined YouTube (GOOGL), Facebook (NASDAQ:FB) and others in offering panoramic live views, but not everyone can post for now. Live 360-degree videos will be marked with a “LIVE 360” badge and users can change the angle of their view by either moving their phones or swiping their screens.
5. GOP Readies Swift Obamacare Repeal With No Replacement Ready — the first major act of the unified Republican government in 2017 will be a vote in Congress to begin tearing down Obamacare. However, the Republicans and President-elect Donald Trump have no agreement thus far on how to replace coverage for about 20 million people who gained insurance under the health-care law. Republicans are debating how long to delay implementing the repeal. Aides involved in the deliberations said some parts of the law may be ended quickly, such as its regulations affecting insurer health plans and businesses. Other pieces may be maintained for up to three or four years, such as insurance subsidies and the Medicaid expansion. Some parts of the law may never be repealed, such as the provision letting people under age 26 remain on a parent’s plan.

The week ahead — Economic data from Econoday.com: