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November 21, 2017
  Stocks Make New All-Timers To Celebrate The "Tuesday Before Turkey Day"  

The Chinese equity market bounced half a percent overnight. Hong Kong rose 2 percent, and Japan popped a percent. JGB yields fell 1 bp to 3 bps above the BOJ’s target of zero.

European equity markets were up less than a percent this morning. Meanwhile, German government 10yr yields fell 1 bp to 0.35%.

Over in the US, the equity futures were up a third of a percent ahead of the open. The dollar was weaker vs. other paper. Gold was flat, and yields were sharply higher in the short end once again but flat in the long end of the curve.

We opened up a third of a percent or so in the S&Ps and immediately ramped higher to hit our high for the day around mid-morning. That high also happened to be another new all-timer.

The S&Ps spent the remainder of the session flopping and chopping just off the highs to go out just off the best levels of the session with a gain of over half a percent.

Volume picked up a little (0.8 bln on the NYSE and 2 bln on the NASDAQ). Breadth was over 2 to 1 positive on the NYSE and slightly positive on the on the NASDAQ. New highs swamped new lows on both exchanges (242 to 35 on the NYSE and 289 to 47 on the NASDAQ).

Stocks Were Mostly Higher:

Stocks were mostly higher once again, and in addition to the S&Ps, NASDAQ, Dow, and NDX all making new all-timers, the IWM small cap ETF once again was a top performer and rose over a percent to a new all-timer. Obviously IWM buyers continue to be confident that a tax cut will be passed, and the Senate is expected to vote on its version next Thursday.

Commodities Were Higher:

Brent crude rose half a percent. Copper rose over a percent. Palladium rose a percent, and platinum bounced just under a percent. Silver bounced back from yesterday’s beating by a hair. The CCI equal-weighted commodity index ETF (GCC) rose a touch.

Gold Bounced:

Dec gold rallied about $3 overnight to as h igh as $1280 but then slipped again ahead of the US open to essentially open flat.

As the dollar weakened vs. the yen and other paper, the yellow metal firmed and proceeded to squirt up to as high as $1284. That high marked the best levels of the day, and the metal spent the remainder of the equity session backing off from that high to go out near the middle of the day’s trading range at $1280 for a gain of just a touch on a spot basis.

Gold Stocks Bounced:

The GDX opened up a touch and rallied with the metal to just above yesterday’s highs and then weakened with the metal from those highs. Unlike the metal, however, the GDX received a closing bounce and went out just off its earlier highs with a gain of just over three quarters of a percent.

As has been the case for nearly a month now, today was another session where the GDX and gold went nowhere. I’m not sure there’s much to say about that other than of course the obvious fact that periods of low volatility tend to give way to periods of high volatility.

Tomorrow we’ll get the FOMC minutes, although I find it difficult to believe there will be much in the way of new information in them.

The Dollar Was Weaker vs. Other Paper:

The dollar was weaker vs. other colored paper. The dollar index fell a hair.

Treasury Yields Were Higher In The Short End:

Treasury yields fell 3 bps in the long end. Yields in the Fed sensitive 2yr rose 1 bp to 1.77% and another new multiyear high. Junk debt was firmer, with the HYG picking up a touch.

To Sum Things Up:

It seems the year-end rampjob in stocks is beginning right on time ahead of the Thanksgiving holiday. Surprise, surprise…

Given Thursday’s holiday and my expectation that not a whole lot will happen tomorrow or during Friday’s session, there will be no evening letter tomorrow or Friday, but Intraday Comments will run as usual for subscribers. The evening letter will return on Monday, November 27th.

While I cannot provide personalized investment advice or recommendations, I welcome feedback and observations. You can email me at Lance Lewis. For all website and subscription related questions, please email DMS Support

Disclaimer: Lance Lewis periodically publishes columns expressing his personal views regarding particular securities, securities market conditions, and personal and institutional investing in general, as well as related subjects.

Mr. Lewis is the president of Lewis Capital, which is a registered investment advisory firm in Dallas, Texas. The firm regularly buys, sells, or holds securities that are the subject of Mr. Lewis’ columns, or options with respect to those securities, and regularly holds positions in such securities or options as of the date those columns are published. The views and opinions expressed in Mr. Lewis' columns are not intended to constitute a description of the securities bought, sold, or held by the firm in its capacity as an advisor. The views and opinions expressed in Mr. Lewis' columns are also not an indication of any intention to buy, sell, or hold any security on behalf of the advisor’s clients, and investment decisions made on behalf of clients may change at any time and for any reason. Mr. Lewis' columns are not intended to constitute investment advice or a recommendation to buy, sell, or hold any security.

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