DOW Falls Short Of 20K; But Chances Are We Break Through Before Fridays Close; Some Bio-Pharma Stocks That Got Upgrades Today – Going Into 2017
The DOW failed once again to breach the 20K mark today; but, the prevailing opinion across Wall Street is this bull run still has legs, and we are likely to see +20K perhaps by tomorrow (Wed.) but, before the end of this week. The final trading week of the calendar year; and, the first three trading days of the new year are overwhelmingly positive for stocks (historically). Moreover, POTUS-elect Trump’s pro-growth message and agenda are a welcome respite for Wall Street and corporate America. The anti-success, anti-business, class warfare rhetoric of the past eight years has been replaced with a pro-growth, optimistic vision that is having a positive impact across the U.S. economy — and, is a major reason why this market has had so much momentum since Mr. Trump’s November 8 victory, — and why this rally has more room to run.
Are there landmines that could emerge that not only stops the upward momentum of the market; but, lead to a major selloff? Of course. There are looming speckled swans that could certainly morph into full-blown Black Swans: Rampant cheating among OPEC members could lead to a big drop in oil prices, back below $40 — which would probably not be good for the overall market, at least in the short-term. There are at least three elections in Europe that could lead to a death spiral for the Euro — if we aren’t already witnessing it now. Angela Merkel’s very liberal posture regarding welcoming one million and counting displaced refugees from the Middle East and Africa has backfired; and, Chancellor Merkel is now considered vulnerable to being thrown out as the populist movement claims another victim — Cameron and Brexit in the U.K., and POTUS-elect Trump victory here at home. If Chancellor Merkel does lose, this outcome could further fracture the European Union and the Euro. France and Italy will also hold elections, and Greece may as well. If we begin to see the Euro collapsing, this could be damaging to stocks as a whole; but, economically beneficial to Europe in the long run in my view. However, with less inter-connectivity, there are those who will fear that the prospects for another continent-wide war will be higher, absent a common currency. You have to figure that the prospects for some kind of confrontation/dust-up between the U.S. and China in the South China Sea in 2017 is high. How both sides try to prevent that, or manage it when it happens — will no doubt be bad for stocks when/if it happens. Then there is always ‘Mini-Me’ in North Korea. Then, we could have an overly aggressive Vladimir Putin, encroaching on NATO’s border, and expanding its geographical footprint in the Arctic. Iran cheating on the nuclear deal, and a Cyber Pearl Harbor, and/or major terrorist attack/s here at home, would all, also have negative consequences for stocks — but, positive for precious metals (gold/silver), and bonds. But unless and until any of these scenarios actually begin to emerge, the overall trend for U.S. stocks is higher into the end of 2016, and good, to very good in 2017..
Three Bio-Pharma Stocks That Got Upgrades Today
I am sure there were more than the three bio-pharma stocks/companies that got an upgrade today; but, these were the ones I heard about on CNBC. I missed the Wall Street firm that upgraded Incyte (INCY) Pharmaceuticals; but, the company is getting a thumbs up on the street as a potential prime acquisition candidate by one of the ‘alpha males’ in that space for 2017. Shares aren’t cheap, +$100; but, consensus among analysts who cover the stock and sector see potential, significant upside for shares in 2017.
Meanwhile, Raymond James upgraded their outlook for BioGen (BIIB) and recommends their clients ‘accumulate’ shares as we head into 2017. This is also not a cheap stock, as shares trade near $300.
Finally, Credit Suisse upgraded their outlook for Portola Pharmaceuticals (PTLA) and sees 2017 as a pivotal year for the company and its share price. It is late for me this evening and I do not have the drug for this note; but, Credit Suisse raised the chances that PTLA’s drug receives FDA approval from 40, to now 65 percent. Credit Suisse has a $30 price target on the company’s stock, which closed today at $22.78. All for now V/R, RCP