Daily Market Update – December 19, 2016 (Close)
There isn’t too much going on this week in economic news, but for the first time in a year, it doesn’t really matter.
With the FOMC now having announced an interest rate increase, we all know that somewhere along the line there will be another one and we all know pretty much what those indicators are going to be.
One of those indicators, the GDP, does come this week.
What we will all be looking for is whether or not we get some surprises, like we did last year, when the expectations for growth following the FOMC’s rate hike, just didn’t materialize.
So we kept going back and forth between being elated that the economy wasn’t growing as expected to being disappointed.
I think that this time around there can only be disappointment.
But, it does appear as if the die has been cast.
What we don’t know is whether the words of the President-Elect, with regard to economic expansion through government fueled infra-structure programs is going to be a reality.
If so, then how much fuel will there be and how quickly?
That’s a series of questions for someone else.
This week I have lots of cash, two nice ex-dividend position and 2 expiring positions.
That means that I might not mind putting some money on the line, but do already have some income coming in for the week.
As has been the case for the past few months, I’ll be looking at commodities and perhaps ways to milk some change out of some long dormant positions, as well as generating some income from some new positions.
With markets at such highs, it’s hard to identify any single position or two that could warrant taking risk, but those uber-risky commodities seem to offer me the solace tat run of the mill stocks aren’t offering right now.
Hopefully, that won’t be the case through 2017 as we either approach an inflection point or a launching point in the next month or two.
The one trade that seemed worthwhile was trying to ensure that the Dow Chemical positions going ex-dividend on Friday and currently well in the money had a little more life in them.
Even though the options don’t expire until the end of the January 2017 option cycle, at the current share price there was a pretty good chance that they would get assigned early to capture that $0.46 (3.1%) dividend. By rolling over another month, even if assigned early, the $0.52 additional premium would more than make up for the lost dividend and get the cash from assignment back into my hot little hands in time to re-invest next Tuesday.
If not assigned early, then it’s like getting paid 2% for the month and still being able to withstand a 6% decline.
Not too bad, but I hope to do some more tomorrow, as today was a pretty listless day, otherwise