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September 5, 2017

The S&P 500 is on a roll, having finished last week with a 6-day winning streak, its first such run in 3 ½ months.  The stock index, up +12.2% YTD (total return), has posted a gain in every month YTD and in 17 of its last 18 months.  We are in a period when good news is embraced and bad news is summarily dismissed.  The good news: tax reform is back on the table; interest rates are down, including mortgage rates; GDP growth was +3.0% in the 2nd quarter, its best 3-month gain since the 1st quarter 2015.  The bad news: only 20% of Houston homeowners with flood damage have insurance protection; North Korea continues to rattle nerves with its testing of yet another intercontinental ballistic missile that was fired over Japan; the US dollar is slumping as the Euro has gained +13% vs. the greenback YTD, causing import prices to rise (source: BTN Research).

President Donald Trump’s first pass at tax reform, released on 4/26/17, consisted of “Goals for tax reform” that were summarized on a single page: grow the economy; create millions of jobs; simplify the tax code; provide tax relief to middle income Americans; lower the corporate tax rate.  Behind the scenes, the White House has continued to work with lawmakers on the details needed to make those goals happen.  Treasury Secretary Steven Mnuchin said last Thursday (8/31/17) that a proposed tax plan will be released to the American public by the end of September (source: White House).

Congress returns from its 5-week summer recess today (9/05/17).  September’s agenda contains a long list of items: pass a budget for fiscal year 2018; raise the nation’s debt ceiling or face the prospect of a government shutdown; craft a tax reform bill, legislation that would be the first major change to our tax code in 31 years (source: Congress).


Notable Numbers

BETTING ON LAST YEAR’S WORST – An equal dollar investment made at the end of the day on 12/31/16 in the 10 worst performing individual stocks within the S&P 500 from calendar year 2016 is up +16.0% YTD through 8/31/17 (source: BTN Research).

FROM THE GULF – The Gulf of Mexico was the source of 18% of US oil production in calendar year 2016, approximately 1.6 million barrels a day (source: Department of Energy).

LONE STAR STATE – Texas is the # 2 state in the United States in terms of gross domestic product (GDP), trailing only the state of California (source:

THREE TO TWO – An individual stock trade “settles” in 3 business days, i.e., the stock buyer must deliver cash and the stock seller must deliver the securities within 3 business days.  Beginning Tuesday 9/05/17, an individual stock trade will “settle” in just 2 business days (source: Securities and Exchange Commission).

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