The stock market was sagging last week until tax reform gained momentum in Washington and that shifted the market mindset from “will we get tax reform?” to “which sectors and companies will benefit from tax reform?” This led to a shift in sentiment from technology stocks in favor of domestically focused and high-tax rate paying companies in particular. In our view, this move was a wide brush that hit companies with favorable to strong underlying fundamentals like several on the Tematica Investing Select List such as Disruptive Technologies investment theme companies Applied Materials (AMAT) and Universal Display (OLED) as well as those more deserving of being rotated out of.

Late in the week, there was considerable progress made in Washington as Congress passed a stopgap spending bill to prevent a government shutdown this weekend that keeps the government running by kicking the can to Dec. 22. In back-to-back statements, both Democratic and GOP leaders declared a meeting with President Trump as “productive” and that has us cautiously optimistic.

Also, late in the week, it was announced President Trump would share his long-awaited infrastructure proposal in “early January” in the form of a detailed document of principles for upgrading roads, bridges, airports and other public works ahead of his State of the Union address in late January. We’d note this proposal has been delayed from the third quarter of this year, but given the D+ grade of US Infrastructure by the American Society of Civil Engineers we see infrastructure rebuilding more as “when” not “if.” Over the coming weeks, we’ll be combing over investment candidates poised to benefit from such a funded proposal that meet our three-fold investment criteria.

These events, combined with the welcoming of the better than expected job creation figures in the November Employment Report, led the market to recover some ground after finishing lower during the first four days of the week. With that recapping last week, now let’s take a look at what’s coming at us in the week ahead…

On the Economic Front

On tap this week is a bevy of economic data points on jobs, manufacturing, inflation and retail sales. It’s going to be a big one, and one that could either firm up or tear down current quarter GDP forecasts by the Atlanta and New York Fed banks.

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