Art Hogan


Last quote by Art Hogan

If we want to get something passed by the August break, it's going to look a lot like tax reform light. If we settle somewhere between the 25-30 percent corporate tax rate, that is far from the 15 percent offered in the campaign trail and the 20 percent currently in the House plan, (and) I think that's where we end up. It's not a negative, it's just not the positive the market had priced in.
NEW Mar 24 2017
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Art Hogan is associated, including Fed, September, and datum. Most recently, Art Hogan has been quoted saying: “If they can get past this and move on to Trump's other programs, the market will breathe a sigh of relief. It's hard to know, after this week, how much of that was priced in. … It's not going to be [a corporate tax rate of] 15 or 20 percent. It could be 25 percent or 30 percent. It will be incremental. It will be tax reform light because you won't have the savings from repeal and replace.” in the article Market salivates as Trump, GOP turn to policy with most juice for stocks.
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Art Hogan quotes

Understand when you think about the energy patch in general, you have to separate out what the fully integrated guys were doing. What drags the group down is when you lump in the majors, and they were spotty.

We've come into a period of time where we see fundamentals and earnings improve and you have to juxtapose that with everything that's going on in Washington. Let's put this on a percentage basis: 50 percent of this move has been on the ppromise of tax cuts and deregulation, ... but a lot of this stuff has to come to frutition.

We would have prioritized what the president did in the first two weeks with the things that please us most. Building walls, changing immigration laws on the fly, starting trade wars … all that has the market saying, Wait a minute, you ran on tax cuts.' Whether it's done by reconciliation or done by legislation, it's going to take time. The shift back to focus on fundamentals, it's not going to take us substantially higher. It's taking us back to where we were two weeks ago.

My guess is we're kind of running out of tape bombs that come out of the White House, for the short term. It feels as though my guess is we get any glimmer of a shift back to the fundamentals, the market finds a path higher.

Here's the good: It's better than expected and much better on the private payrolls. When you see the unemployment rate go higher for the right reason, that's a positive.

I certainly don't think investors want people who run corporate America to be afraid of making smart business decisions.

It looks like, at least in the early going, the market has shifted its focus from things that are positive, like economic data and earnings, to things that are more confusing like picking fights with Mexico, Iran and Australia.

Investors can get behind pro-growth policies and can't and won't support protectionist policies. Trade wars, like all wars, end negatively for all.

If you say the market is 30 percent driven by fundamentals and 70 percent driven by the hopes and promises of the big three – tax cuts, infrastructure spending and deregulation, then the big three just got harder.

Companies feel a little more confident that investors are looking for ideas and there's a more captive market. It feels like you've got a receptive marketplace for it. Plenty of companies have been waiting long enough. Last year, companies were reticent to try the markets. A couple unicorns that came out didn't perform very well. That changes a little bit when you think about market conditions thus far. So you're more confident that you're going to have a receptive audience. But every deal is not going to go spectacularly well.

He didn't decide to go high. He decided to go populist and protectionist, and that's something we're going to have to get used to. When you put together populism and protectionism, it has a lot of economic fallout. That's how he got here.

If you were geared up to buy the election and sell the inauguration, you're disappointed. Now we start to focus on whatthe first 100 days look like.

The market can (go higher), but that's based less on Trump coming in and more on the fact that fundamentals have gotten better. All sorts of things that could provide stimulus to an economy that's already improving can be brought forward, but none of it is going to happen in the first 100 days.

There could be something interesting coming out of the hearings and his press conference. They're forcing us to multitask. Where the 10-year was – that was a pretty significant move in a short period of time. Some of that moderation we're seeing is not just happening there. It's happening in the financials.

All of the real rapid rotation trades needed some relief and to take a breather here. The real thing to me is they're being replaced by something else. When the financials pulled back here with the 10-year, tech and health care jumped in significantly.

The key thing for me was how quiet the the pre-announcement season was. A quiet pre-announcement season portends for a positive earnings season.

The real excitement earlier this morning came on the back of global markets rallying and [strong] PMIs. You really have to juxtapose the strong gains we've had [in stocks] against the strong dollar. I think that's starting to seep into the market here.

I think it's got to be closer to 4 percent than it does 3 percent to be a problem. Right now, it's the pace of change that's been eye opening.

For the first time, they're beginning to take that seriously. We can't keep whistling by that strong dollar.

We're certainly perfectly willing to price in all the good things about the new administration ... but I don't think there's many times where we've talked about the other side of the story – the tariffs, the trade wars. That may be the first quarter of next year's business, to realize the negative side of the story.

I think we see much more of a correlation when things are coming down.

When you look at this unambiguously better tone for the market, a lot is predicated on what will happen in 2017.

We've obviously had a pretty significant run over the past few weeks, but with hardly any down days. The market is trying to price in a paradigm of fiscal stimulus and deregulation.

Now remember, this is the same [ECB President] Mario Draghi that says more than he does.

Regardless of who won, we've got a fundamental backdrop that has been doing better and along with that there is the possibility of a pro-business environment in 2017.

We got a bounty of economic data today, but all of that probably takes a backseat in terms of our attention to oil.

So the market would get nervous about the other side of the equation, where it's the more inflammatory things about – fill-in-the-blank, there's plenty – walls and tariffs and trade wars.

It would be difficult for anyone to look presidential when being reactionary on Twitter – full stop.

I think we meander more than we press new highs, because I think we're going to see unwinding of some of the stretched trades.

The economic data is important and the Fed is only talking about raising rates two times next year.

We will change our tune if it continues at the pace it's going.

I think we're at a point now where we a transitioning from the reaction to the election to a reaction to the current fundamentals, which is important.

When you look for signs that a new paradigm is in place for the economy, the strong dollar doesn't hurt them as much as the big caps. Unlike the S&P 500, they don't do 40 percent of their business overseas.

It is a bit early to be calling the Big Rotation. We've been declaring that rotation for years. ... I'm afraid its hard to think about that happening in the current demographics we have. Baby boomers have more investable assets than millennials do.

They aren't really going to benefit from Trump's stimulus spending on infrastructure and are sort of sitting in the middle. They aren't part of the oversold sectors such as banks and health nor are they high dividend paying stocks that getting sold off.

I think part of the better feelings in the markets has been that - we have a more moderate Trump. He was surprisingly gracious in his acceptance speech, he was surprisingly gracious in his meeting with Obama. That calms the nerves. But remember candidate Trump is separate from President Trump. He can be different people.

He had to say things to get elected that he's going to realize he can't accomplish. All of that could come home to roost at some point and that will be less market friendly.

It's hard to make sense out of the technology space. To the extent you look at this and say. if you're going to take profits in technology stocks, IBM is not one of them. But Microsoft has had a great run, and Facebook, Amazon, Netflix, Google (Alphabet).

We've heard the good stuff so far, but you have to wait for the other shoe to drop. A lot more was said on the campaign trail than has become elucidated.

There are three things you need to contemplate. First, the lessons learned from Brexit. We know what happens in a Brexit-like sell-off. You get a knee-jerk reaction to the downside and then we move higher very quickly; we just sped up the process on that.

Second, it's the fact that we got conciliatory speeches from both candidates.

We have had elections for 240 years and some crazy ones at that. The world keeps spinning. I bet that will be the case come November 9th.

This is just the agita that happens around a Fed rate hike, and since we only do it once a year, people get nervous about it. The meeting is going to come and go and we're going to have the same hawkish message we had at the September meeting.

I sit next to one of the traders here and he was telling me he'd never seen the Dow fall so quickly. There's a lot more to this, but we won't know how much until we get more information.

Regardless of the fundamental news we get next week, earnings or data, this may be the story for the next 10 days.

You miss on any of these things … earnings, revenues, guidance or gross margins – you get taken to the wood shed. Whereas, if you beat, you're up just a percent.

The backup in yields has been driven by the anticipation that the Fed's going to raise rates in December, and also comments out of [Bank of Japan Governor Haruhiko] Kuroda. [BOJ is] not increasing the size of their quantitative easing, and the European Central Bank is running out of gas and not extending their program past March.

We want the pattern to be that the second half is stronger than the first half.

People are getting out of defensives and looking into growth.

There's a much larger chance that we break out of range to the upside than the downside and I think it happens before the end of the year.

There's a gap between the two candidates. It feels like the gap remains.

While the sample set is still very small, earnings season feels lackluster.

If you drill down below the headline, did wages go up? Yes. Did hours go up? Yes. Did participation go up? Yes. That's what makes it good. What would've made it great? A number above 200,000.

Does energy continue to remain firm? Do we get an answer on any of the biggest questions? And that's Twitter and Deutsche Bank.

I think the Fed speeches are going to be noise in the background today. Right now, we're looking at a data-heavy week, but most of that is due at the end of the week.

Once they come to some resolution on the difference between what they are charged, $14 billion, and what they are going to pay, call it $5 or $6 billion, the market is going to be afraid there is a problem.

The issues with Deutsche are the first five things everyone is talking about. It's very easy after just 8 years to get that muscle memory from Lehman in 2008. I think that was reflexive.

Deutsche Bank sneezing should not cause all of the other financials to catch the flu. The more important point is the uncertainty around the election season. That becomes the clear and present risk. What does it mean to the markets? We're going to assume it's negative either way.

That's when the market starts taking it seriously. Right now, the polls have it too close to call, and that's a change ? two weeks of gradual momentum on Trump's side and two weeks of flattening out and no momentum on the Clinton side. You have a pivotal event. then we'll look at it (Tuesday), if it stays too close to call, that's a negative. The market wanted to price in an inevitable more-of-the-same victory.

This is a wait-and-see week. To follow through, you're going to need some clarity from the Fed and the BOJ.

There's an election coming up. It's too close to call and you don't know what the aftershocks are going to be.

We hope that's just August data and it's an aberration and not a trend.

Now we're flat post Labor Day. What's changed? Nothing, the only thing that literally changed is the consensus around a September liftoff has dissipated because of lackluster data.

I think we're at a point in time where the path of least resistance in this market is certainly lower and will be lower.

The tone of the market is as uncertain as it's been all year. Up until yesterday, we knew what every Fed official was having for breakfast, lunch and dinner. The problem with this week is now we've shut that down.

I think the reason the Nasdaq is hitting all-time highs is because of this sector rotation we've seen recently.

We've had three to four pieces of relatively disappointing economic data, so that puts some focus on today's Beige Book.

I don't think the market would celebrate a weak jobs report.

Post-Jackson Hole, all eyes are on data. It's been improving, and I don't expect the jobs data is going to be any different.

We're kind of leaking out a little bit. Oil moved up 9 percent last week on OPEC and the prayer that Saudi Arabia would just do something on production in September. When that energy complex sells off, it does correlate on the downside. Now investors are as afraid of Janet Yellen saying something egregiously hawkish as can the S&P trade at 17 times in a 1.5 to 2 percent GDP growth environment.

They're going to raise rates this year. I think the only open question is whether September is on the table. The Fed funds futures don't think it is. They ran out of excuses. Brexit didn't stop the world from spinning, and the election shouldn't be a factor.

I think [stocks] will be very much like this week. We'll have sell-offs that become muted and rallies that become muted. What could change it is more jawboning around Saudi Arabia and the September meeting and production cut rumors. That played itself out this week. We have a 9 percent gain in energy prices this week, almost all of it on that.

We hit a trifecta yesterday, and that's certainly a reason to take a breather. The magnitude of the move isn't a big one. I think we're in the middle of a consolidation day.

Car sales trends have been good, and that's been an important part of the recovery we've seen over time. We've been talking about the auto peak for three months. It hasn't exactly hit us yet.

It's just a mild drift lower. It's not even down a percentage point in six days.

This is really good news. It's not going to change monetary policy in the near term because we're still unraveling the effects of the (EU) referendum.

That's what the market is recalibrating toward. It's just dawning on us that it's a process that takes months, not days. It will become a hotter issue again once a new prime minister is named in September.

It's going to be a quiet day, but it is the first day of the quarter. …You're just not going to capture much of that on a Friday before a long weekend.

The markets are going to start reacting to the polls. The markets still favor a Hillary Clinton presidency over Donald Trump. Equities tend to take the summer off, or at least that's the theory, and then fourth quarter is better.

There's some logic to the rally, but I don't think there is any staying power.

You've got an unwind of a defensive trade that is probably enough to move the S&P to the upper range of the last 12 months.

Brexit has been an overhang, but it's not the overhang that's kept the S&P from breaking to a new high.

Interest rates are lower than their 30 year average as well, so you can?t use the same barometer when you have a 10-year that?s yielding 1.6 percent.

I think we're all waiting for Brexit to happen and not have it be a catastrophic event. We're unwinding some of the damage done last week, but no one's celebrating anything.

Civility took over and the debate over Brexit stopped for a period of time.

They've gotten very expensive and they continue to do so. If you look at the multiples on utilities or staples or telecoms, and the yields being at historic lows, you want to be careful there because it's a very crowded trade.

We need to get through at least this Fed meeting, which I think comes and goes and is a nonevent, and we need to get through the Brexit vote, which I also think will be a nonevent.

It's manifesting itself much more in global yields than in currency markets and equity markets. At the end of the day, we've got a stay vote and then we can move on and start looking more constructively about that market.

I think the market moves are what's going to keep us on our toes. So, now it's a shift back to the fundamentals and are the fundamentals good enough for the market to price in a July interest rate hike? It feels like it is.

I think the debate in the next week is: 'Did the data give enough ammo for the Fed to go in June or July?'. I think we lean toward July, because there's too much at risk for them to step in front of the Brexit vote by eight days.

You have a smattering of economic data. To the extent you had inventory data that looked bullish for oil, if there's a big number at 10:30 that could help.

I would love to say we'll have some follow-through. I certainly think, as today we'll see how Europe looks in the morning. That was certainly the kick-start of our day.

I think investors are becoming more comfortable with an early rate hike because even if the Fed does raise rates in June, it will remain extremely accommodative.

I think you start paying attention to the progress in the economy. This is second-quarter data.

If oil kind of hangs in and we continue to have some better-than-feared earnings reports as we saw [in] the financials last week, the market may be able to hang on.

I don't think this is a pivot necessarily on our jobs number. This is a pivot on what's going on away from us.

You've got a combination of a pivot in a long-term run in both the dollar and oil and that's going to pressure equities.

It's intraday volatility for sure, but it's a good sign. Today felt as close to capitulation as you can get. To have it reverse itself, it's very strong sign technically.

That's working its way into the marketplace today. ... Bullard's commentary is very constructive for the market.

The good news is, after the close in energy prices, we know it's not going to go any lower.

I get the sense where this market is one where ... the overarching concern is global macro, so rallies are seen more as selling opportunities.

The biggest thing affecting markets today and this year, we're coming in with an assumption the global economy is slowing more in '16 than '15. We're worried about China.

It's a combination of that event ... and an assumption that valuations are out of line with global economic growth.

People are concerned that the Fed missed a window of opportunity last year and will raise rates at a time when the economy is slowing down.

I think it's very much global markets are in a risk-off mode. It's very hard to step in the way of (that).

A lot of it has to do with China and a lot of it is overdone. The China PMI hasn't changed much. It's not unusual to have an outsized reaction when you've got a base case that 2016 could be a tough year.

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