January 16 Equities Commentary: Bob Iaccino

Good afternoon. This is Bob Iaccino coming to you from the CME Group trading floor in Chicago talking DOW Futures. Huge reversal in the DOW. We get above 26,000, that mythical or psychological, whatever you wanna call it, round number targets that everybody puts, one being 26,000. You can guess where the next one is, probably 27,000. But 26,000 was reached. Got as high as close to 26,050 right in that sort of 50 points above 26K was reached, and then we fell off. This particular jump was mostly off the open. The DOW was up 240 points at one point before the late-day sell off that we have now experienced. It's interesting to note, these psychological levels tend to not hold. They tend to be more targets, at least in the ultra short term, which is what we saw today. Now, some of that early morning drive was off of the Citigroup numbers. Now, Citigroup is not a DOW component. The symbol is C. But Citigroup took a $19 billion charge, a one-time charge to their earnings based off of some tax-deferred investments that are going to be affected by the tax cut and job creation act passed by Congress, signed by President Trump. And even with this 19 billion charge, which some say could reach 22 billion by the time they're done they still beat both on the top line, the bottom line, net income, beat handily on all of the categories that traders tend to look at. Now, again, Citi is not a DOW component. However, throughout this week, Goldman Sachs, Bank of America, both DOW components Now, United Healthcare and the banks are going to be big for the DOW this week. United Healthcare this morning beat. They beat on top line, they beat on bottom line, and they also guided higher again referencing the tax act. So United Healthcare jumped over 2 percent at the high of its trading. And then, again, as I mentioned earlier, Bank of America due, Goldman Sachs due this week, and the Citigroup earning kinda bleeds into those. We had Wells Fargo beat last week. We had Blackrock beat last week. We had JP Morgan beat last week. We got Morgan Stanley this week which is not a DOW component. But, again, Bank of America, Goldman Sachs, United Healthcare all DOW components. United did well this morning. Bank of America and Goldman Sachs expected to beat as well. Now, Goldman Sachs is up today given a lot of boosts from the dogs of the DOW theme. Goldman Sachs was one of the laggards in the financial sector last year so they're being bought out by people who believe in the dogs of the DOW trading theory. You can look that up. It's pretty a simple concept. But stocks that lagged in their sector previously that are in the DOW are gonna beat the next year. That's really the theory in a nutshell. So Goldman Sachs benefiting from that. Again, the DOW reversed all of its gains in toward the end of the day. This is Bob Iaccino talking DOW futures from the CME Group trading floor in Chicago.