Yesterday was a beautiful day for the stock market. The DJIA was up over 200+ Points. You couldn’t ask for a better day. I’m going to be all over the place today so pay attention!
Now that the election is behind us a lot of investors are coming back into the market. The worries about indecision have been put to rest. Now that the House is majority Republican the checks and balances of the House and Senate is in place. Will this change anything? I don’t know, but for some people they believe this will prevent or minimize the amount of anti business bills to pass. Politics isn’t my specialty! I’m only concerned about the stock market. What the government does is out my control.
The first positive I greatly appreciated began with President Obama stating that he was receptive to talks about extending the Bush tax cuts. Reducing the amount of tax across all incomes is ideal to grow the economy. Less tax allows people to spend more money on goods and invest money back into small businesses to create jobs and allow opportunities for growth. I’m not rich and I get taken to the cleaners on paying tax. I don’t care who you are and how much money you make, when you have to pay higher taxes you’re going to get upset. Bring on the tax cuts! Tax cuts welcome! Another mention by Obama was natural gas. Natural gas backed by the government is great for Westport Innovations (WPRT) and the oil service companies. Companies like Weatherford International (WFT), Schlumberger (SLB), Halliburton (HAL), and Baker Hughes (BHI). Another good one would be Chesapeake Energy (CHK).
With higher commodity prices the energy sector should be perfect for some great returns. Over the past few days Weatherford (WFT) has moved up big. Yesterday it was up over 6.0%. I continue to back this company as the stock is cheap compared to its earnings growth. Westport (WPRT) reported earnings and from the earnings transcript business is good. It was beat up yesterday and is down as I’m writing do to the announcement that they will be issuing more stock, which in turn dilutes the current shareholders value. Usually this is a negative, but I believe this is a great opportunity to buy the stock lower. Remember Congress will reintroduce the energy bill in November for passage. Getting this bill to pass will boost Westport’s earnings drastically. This stock will move up so fast even Usane Bolt would be left in the dust! Lastly, higher commodity prices will sweeten the earnings for Caterpillar (CAT) as higher prices will boost demand for their machinery. I thought CAT would hit the low $70’s in price. I don’t think that is going to happen anytime soon!
The buying action over the past week continues to surprise me! Stocks should continue higher for the remainder of the year. I’m still looking for the big pull back, but I remain optimistic. Oh yeah how about that October employment number! October was a great month as we added 151,000 jobs. First gain in 4 months. Not bad!
Have a great day!
Clay-
Have a Question? Send Questions to wheatleycsmk@gmail.com
New Content every Thursday
Occasional Stock Market Commentary during the week.
Feedback Welcome!
Interested? Please become a follower (This gives me an accurate number of readership) I would like to see this number grow! Click the follow button on the right hand side of the screen and follow the prompts. It's easy!
No comments:
Post a Comment