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Many traders have been quick to say the so-called Trump trade could be over, but market rallies don't usually end when everyone is saying they will, according to Bespoke Investment Group co-founder Paul Hickey.
The analyst believes February's strong historical performance during bull markets will continue despite the heated political climate that has raised doubts about the sustainability of this uptrend.
"The end of January has historically been weak over the last several years," Hickey said Tuesday on CNBC's "Futures Now," noting an overwhelming number of business news stories suggesting the Trump rally was over. "When you do see those kinds of headlines, most market peaks and rollovers are usually not so unanimous in the headlines."
The S&P 500 ended January on a four session losing streak. Yet the major indexes in January still finished higher. Hickey argues that February could add to those gains.
Since 1985, during bull markets, February has averaged a gain of nearly 3 percent, with positive returns 83 percent of the time, according to Hickey.
The analyst's research shows that February typically starts off on a positive note and then keeps rising through the middle of the month. By the end of the month, a sideways pattern usually emerges.
"Since 2010, it [consumer discretionary] has been up every February and going back to '85 it's been up nearly three-quarters of the time, average gain of over 2 percent," he said
Hickey says materials have come in positive 70 percent of the time in February over the past 30 years. In the years when there's a Republican controlled Congress and White House, it's the only sector that has outperformed 100 percent of the time.
A pause in the historic stock market rally could be just days away, according to UBS Financial Services Director of Floor Operations Art Cashin.
Cashin, a fixture on the floor of the New York Stock Exchange since 1964, believes the market has gotten ahead of itself. His call is based on the Dow's speed to 20,000, low volatility and what generally happens during a president's first year in office.
"That thousand point move from 19,000 to 20,000 was accomplished in 42 days. And, that's very fast. That's the second fastest thousand point move in the history of the Dow," observed Cashin recently on CNBC's "Futures Now."
And, it was done on very low volatility — a trend that isn't sitting well with the Wall Street veteran.
"It is a little discomforting to old timers like me to see you make brand new record highs — multiple record highs — and see the VIX hanging around ten," speaking about the "fear gauge" that serves as a barometer of market fear. "You start to worry 'is that a sign of complacency and where's it going?' said Cashin.
For all the fanfare that greeted President Donald Trump at his inauguration on Friday, the next four years of his presidency could very well be marred by a weakening economy as a result of "injurious" policies.
Most notably, the well-known Trump critic believes that the President's proposed plans could overspend the economy into trouble and drive the Federal Reserve to interfere.
"With his massive increase in infrastructure and the military, I think there's going to be a lot more spending," said Paul. "The debt is going to be much bigger [and] I think that will put more pressure" on the Federal Reserve, he said, with the central bank already planning to tighten interest rates.
"You have good times, and then you have bad times to compensate for the artificially good times," he added. "So we'll have a downturn and that will be a real challenge for the new administration."
The Dow Jones Industrial Average may have fallen nearly one percent since coming within a fraction of 20,000 two weeks ago, but one top Wall Street strategist says it isn't an indication the rally inspired by President Donald Trump has ended.
PNC Asset Management's Bill Stone is telling investors to stay the course despite the Dow's third loss in four weeks.
He predicts stocks still have the ability to hit new highs this year, adding that markets are in an 'indigestion' phase for right now.
"A lot of it has to do with how strong things were. When you look at the really strong areas – financials, energy, small caps – they went on a tear post-election," Stone recently told CNBC's "Futures Now." "Over the past month now, they are down a bit."
With that he said, "I'd say that's still the place to look for opportunities."
While OPEC's key oil producers have been adhering to December's output cut deal, which also included non-OPEC producers, strategist Helima Croft says investors shouldn't expect a big breakout in crude prices this year.
The head of commodities strategy at RBC Capital Markets says the main problem for the commodity remains "bloated inventories."
"That's why we don't think we're going to break out into the $60s or $70s anytime soon," Croft said Tuesday on CNBC's "Futures Now." "We're going to grind higher, [but] it's really the inventory that needs to be worked off to move much higher in terms of prices in the near term."
A note released by RBC Capital Markets last week noted that oil prices could hit $60, but that this 15 percent increase from current levels will likely not happen until the end of the year. The long-term price target reflects Croft's belief that because of oil's inventory excess, the commodity will be moving "pretty sideways" unless a major news story occurs.
"That's why I think this OPEC compliance meeting this weekend is important," said Croft. "If there is some negative headline coming out of that, that's a catalyst to have a sell-off."
OPEC members surprised many by agreeing to cut production of crude in December. But concerns that the cartel's second-biggest oil producer, Iraq, will adhere to the deal have left other countries nervous as to the agreement's future, according to Croft.
Even if the accord is adhered to, U.S. production could cap oil's gains.
"As a result of the increase in prices, we are going to see a substantial amount of oil pouring into the market from the United States," the International Energy Agency's executive director, Fatih Birol, told CNBC.
Believe the Trump rally is losing its footing? You may want to explore investing in gold.
Ambrosino Brothers Senior Vice President Todd Colvin, a trader who has worked on the Chicago Mercantile Exchange trading floor for more than 20 years, pointed out some key patterns that currently support owning gold.
"We're looking at treasury yields creeping lower as well. So you've got everything kind of dynamically moving here," he said. "Gold is a good place to park some money until we start to see the dust settle."
Last week, the Dow Jones Industrial Average came within a whisker of 20,000, a key psychological level, for the first time on December 13. Despite the index's failure to hit that milestone, the index has actually soared eight percent since the November presidential election.
During that same period, gold prices have fallen more than six percent, a sign that the yellow metal might be poised to rebound. Bullion recently set an important bottom near $1130 per ounce, a level traders are now watching very closely.
"This market is way, way oversold on the fact that everything is solved and the [Federal Reserve] is going to raise rates and the economy is back on its feet. I'd like to see some proof in this first quarter data before I write that off," he said.
Yet it could still shape up to be a long season, as a new administration takes the helm at the White House. President-elect Donald Trump's inauguration is Friday, and the uncertainty surrounding which economic policies could be enacted is contributing to Colvin's case to own gold.
"I think gold right now is a kind of wait and see place to be," he said. "Certainly, the Fed is going to have an influence, the dollar is going to have an influence—but ultimately all that is very over-hyped and I think the market needs to take a step back, and gold is a good place to watch from," Colvin added.
Even though Colvin projects the precious metal should reach $1250 an ounce over the next 30 to 60 days, he is telling investors to be vigilant.
"Right now we need to see a $1200 [an ounce] sustainable trade in gold," he said. "If we can't hold it, $1175 is your downside 'get me out' because if we get back down there, I think it starts to turn a little negative."
The Trump rally is on its last legs, and according to one strategist, that means stocks could see a huge drop in the coming months.
Since the election, the S&P 500 Index has rallied more than 6 percent while the Nasdaq hit another record intraday high on Friday. Meanwhile, the Dow Jones Industrial Average continues to hover just under the 20,000 level, underscoring what some analysts believe is a market that's starting to look too frothy.
"The U.S. market, we feel, was already overvalued going into the election," Mark Eibel, director of client investment strategies at Russell Investments told CNBC's "Futures Now"last week.
"It got even more extended, and I think you're seeing this year almost a re-balancing into some of those other areas, whether it's bonds, whether it's emerging markets."
Emerging markets initially under-performed the S&P 500 following the election, but has rallied 5 percent to start the year versus under 2 percent for the U.S. index.
"A multi-asset platform, we think, really plays well in 2017, and that's what we've seen so far," added Eibel.
He did stress that it doesn't mean another run up in stocks is impossible, but with U.S. equities trading at a premium, gains will be more difficult when compared to other parts of the world. This is especially true, given that Eibel believes stocks are in "wait and see" mode ahead of Trump's inauguration.
While the strategist points out that generally, stocks do rally between every election and inauguration regardless of who wins, he does think that much needs to be seen from what Trump will do once he officially enters the White House.
This week, the president-elect sent biotech stocks tumbling on Wednesday following a press conference where he commented on drug pricing. His tweets on certain autos and defense stocks have also sent ripples across the markets.
President-elect Trump's policies will help the U.S. economy, but they won't be enough to save stocks long term, said widely followed perm bear Marc Faber.
"Mr. Trump is pro-business, so it's natural that the mood has improved among the small-businessman, corporations and investors," Faber said Thursday on CNBC's "Futures Now."
But even as Faber expects equities to keep rising, he noted that stocks are only climbing to a "higher diving board" and it will "not be very friendly" to investors if things start to turn.
"I think Mr. Trump will have a better economy, but that doesn't necessarily mean that asset prices will go up, because they are already grossly inflated," he said. Still, Faber's rhetoric was less alarming than in previous interviews, where he called for a collapse worse than in the late '80s.
"If someone wants to be in the market, and I always have part of my assets in equities, then I think other markets than the U.S. are more attractive," said Faber. He noted that in 2017, Argentina, Brazil and the emerging markets ETF are already outpacing the S&P 500. "Foreign markets will outperform the U.S., and if both go down then the U.S. will go down more," he added.
"The only space I like in the U.S. is essentially gold shares, silver and platinum. You have great gold mining companies in the U.S.," he explained. Gold prices are up 3 percent so far this year with the miners rising more than 8 percent in the same period. "I think that gold has performed fantastically well," he added.
Ultimately, Faber expects that the economy will stall out and deficits will rise, forcing Trump to go "begging the Fed to launch QE4," which will cause the dollar to weaken and "precious metals to go ballistic," he explained.
As investors await the Dow Jones 20,000 with baited breath, one widely followed chart watcher believes the current market rally is actually on its last legs.
On Friday, blue chip shares in the Dow Industrial Average flirted with the psychologically charged 20,000 level, which have largely been driven higher by anticipation over President-elect Donald Trump's business-friendly policies. Yet a few observers think the party is nearly over, and the punch bowl is about to run dry.
"Risk has been priced out of the market," said Sven Henrich of NorthmanTrader.com on CNBC's "Futures Now." Henrich, who is known online as the Northman Trader, said that despite the abundance of optimism on the part of investors, technical indicators could be pointing to some near-term pain.
According to the Northman's chartwork, every time the S&P 500 Index has hit new highs, it eventually retreats back towards its weekly 25-day moving average line, which would translate to a 4 percent pullback from current levels. The S&P 500 has rallied 6 percent since the election, and hit an intraday record high on Friday.
"I would expect that at some point there would be a buying opportunity for people who may want to invest in this market," said Henrich. "But if this line breaks, we may see significantly more downside that we've seen in previous corrections as well."
What's more, Henrich also believes that the S&P 500 has continued to trade in a "bearish wedge pattern" that began just after the end of the last recession. The wedge pattern Henrich speaks of consists of two trend lines: One that runs along the S&P's highs and a second that runs along its lows, that look to meet sometime in 2017. It is at that point that Henrich believes the rally will have run its course, and a downside will soon follow.
On a fundamental basis, the Northman Trader is troubled by "record debt levels" that the global governments have incurred.
"In 2016, the U.S. government ran a deficit of over $600 billion," explained Henrich." "If we now add tax cuts and stimulus spending, you're either going to have to cut a significant amount of programs somewhere, or you're going to end up with an even larger deficit."
A major Wall Street firm is encouraging investors to start looking for opportunities in Europe, even as uncertainty surrounding Brexit and upcoming elections in the region linger.
BlackRock, which formally upgraded its rating on European assets to neutral from underweight, believes this could be a 'contrarian' way for investors to profit this year.
"We think a lot of the risk is starting to be priced in. So, you're actually being paid a nice premium," said Terry Simpson, the firm's multi-asset investment strategist this week on CNBC's "Futures Now."
According to Simpson, BlackRock is "actually starting to inch back in... This is still a very undervalued market relative to the United States."
Simpson is telling clients to seriously consider investing in overseas developed markets. Instead of just relying on recent U.S. gains which have been chiefly driven by multiple expansion, he says investors should rotate back into Europe and put money to work in Japan.
"We look at the performance of Europe and Japan absolute relative to the U.S. over the last month to three months. That's actually been a really good trade," he said.
In just the early days of 2017, the FTSE 100 is up nearly a full percentage point, building on last year's double digit percentage returns.
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