Economic Journal - Tuesday, 3/31/2015

(As of 7:15 am PST)

 

US stocks are lower to start Tuesday’s trading, giving back some of the gains seen in the past two sessions. There is no particular data point driving the selling, but as the first quarter of 2015 wraps up today, investors seem to be expressing their concerns over the upcoming quarterly results. Forecasts for corporate earnings in Q1 are dismal at best, with analysts and money managers concerned about a possible P/E contraction and a pullback in stock prices. Despite today’s selling, the first quarter looks poised to book positive results, while the month of March is set to end lower. In overseas action, Asian markets finished mixed as investors took profits on yesterday’s rally. European markets are heading toward a negative finish but remain poised to finish with their best quarterly gains in years. Oil prices are lower while gold and other precious metals are up slightly.

Economic Journal - Monday, 3/30/2015

(as of 7:10 AM PST)

 

Positive developments in Asia and Europe have provided investors in the US a green light and markets are up strongly as a result.  Different stories and reasons from each region have buyers snapping up stocks this morning with the Dow back to positive for the year.  Asia's story is one of an anticipated financial stimulus program for China based on weak economic data coupled with favorable inflation numbers.  Europe is a stronger story based on solid economic data and rumblings that GDP might come in higher than expected for the 1st quarter.  The Greek financial crisis is temporarily on the back burner with most analysts feeling that a last minute bailout is sure to be reached.  In the US pending home sales added fuel to the fire coming in higher than expectations.  The US dollar is rallying today against all major currencies and commodities are struggling as s result with both oil and gold down significantly. 

Economic Journal - Friday, 3/27/2015

(as of 7:10 AM PST)

 

After a week of drama and volatility, today's action is very quiet.  The Indexes are heading for a loss of over 2% this week, in spite of today's uninspiring positive open.  International markets are mixed.  Investors are a little nervous but there is an air of complacency as well.  Is this week's action the start of the much anticipated correction?  It seems that as we enter the second quarter of the year next week, there are a number of obstacles that could make for a challenging investment environment. Gold and oil are giving back yesterday's gains.  Economic data is light. 1st quarter GDP estimates were slightly below expectations at a 2.2% growth rate and consumer sentiment had small gain. Negative sentiment could pull stocks lower as the day progresses.

Economic Journal - Thursday, 3/26/2015

(As of 7:15 am PST)

Negative momentum has persisted into today’s trading session, after yesterday’s selloff which saw the DJIA decline 292 points while the Nasdaq shed a whopping 2.4%. Losses today are being driven by a continued selloff in tech and biotech names as the sector (mostly semiconductors and biotech stocks) has run up strong gains recently. Concerns over military strikes in Yemen and a slowdown in the global economy are also adding to concerns this morning. The economic calendar is light with a report on jobless claims showing claims dropped more than forecasted last week. International markets are down across the board following yesterday’s beating on Wall Street. Oil prices are higher with crude inching above $50 per barrel while gold and other precious metals are up across the board. Expect volatility to remain throughout the rest of the session as investors gear up for tomorrow's GDP estimate.

Economic Journal - Wednesday, 3/25/2015

(As of 7:05 am PST)

US stocks opened near the unchanged line and are moving modestly lower as the first hour of trading gets underway.  The data calendar is thin today, but a report on durable goods orders showed orders slipped in February for the third decline in four months. Excluding the volatility of the transportation sector and military orders, core orders also fell 1.4% in February, marking the sixth straight monthly decline – the first time that has happened since 2012. A weak global economy and a strong US dollar are causing strain on US business exports and thus a decline in durable orders. In corporate news, a merger deal between Kraft and Heinz is making headlines sending shares of Kraft up 32% on the announcement. Overseas action is mixed. Asian markets finished the day mostly higher with the Japanese Nikkei still hovering near a 15 year high. European stocks are down despite a positive sentiment report out of Germany. Gold and oil are both higher while the US dollar is down continuing its range trade this week.

Economic Journal - Tuesday, 3/24/2015

(as of 7:00 AM PST)

 

Economic data from across the pond was mixed with Europe showing renewed economic strength and China lagging in manufacturing growth.  China's manufacturing PMI, a key economic indicator slipped into negative territory while Europe's same measure turned more strongly to the positive.  It seems the dramatic fall in the value of the Euro is spurring increased exports which is jumpstarting the Euro economy.  US markets are very quiet to start in spite of a very strong PMI figure, the highest since October.  This is another indication that the US is continuing to recover.  Of course that means that Federal Reserve interest rate hikes are closer to a reality and that is scaring investors.  Oil and gold are also close to unchanged while the US dollar is up, recovering from a week long decline. Expect worries over an interest rate hike to put negative pressure on markets as the day wears on.

Economic Journal - Monday, 3/23/2015

(as of 7:00 AM PST)

 

Stock indexes are mixed at the start.  The Nasdaq is lagging a bit, but most stocks are up marginally.  Oil and gold are near unchanged while the US dollar is giving back some of the spectacular gains it has seen year to date.  The weakening dollar over the last few sessions seems to be a source for buyers to step up.  A couple of earnings warnings this morning remind us that corporate profit growth for the next quarter is going to be relatively weak to nonexistent, which might prove to push stocks lower in the second quarter.  The only significant data point today was existing home sales which came in slightly below expectations. 

Economic Journal - Friday, 3/20/2015

(as of 7:00 AM PST)

 

Markets are up to start the day, but no one seems to know why.  Perhaps the new Euro Bank Bond buying program is pumping liquidity into the market.  Data is not that impressive and corporate profit projections for the next quarter continue to be reduced with current analysts projecting a meager 1% profit growth.  If history is any indication, the reduced profit growth will warrant a lower price to earnings ratio for markets, which means that we might see a significant pullback as companies start to announce results next quarter.  There is tumult going on in the currency markets since the Federal Reserve issued somewhat of an about face on interest rate projections.  The dollar has fallen sharply from highs established only this last Tuesday and it seems that perhaps key Fed and Treasury officials feel that the dollar has come too far too fast and are making unseen and unspoken adjustments.  Gold and oil are both up on dollar weakness.  Interest rates are on the decline with the 10 year treasury yielding under 2%.  Today is an options expiration date so there might be added volatility as the day wears on.  Markets might give back current gains as investors site a lack fundamental data for the rally.

Economic Journal - Thursday, 3/19/2015

(as of 7:10 AM PST)

 

Yesterday's Federal Reserve meeting set markets afire in the afternoon resulting in yet another triple digit change in the Dow, this time to the upside.  The dollar crashed as markets advanced while Fed Chair Janet Yellen spoke.  The Fed removed the word 'patient' from its policy statement and continued to lean to the June timeframe for a possible rate increase.  The positive reaction of the markets came from the fact that the Fed lowered expectations of any significant rate hike well into the future.  This morning's action saw a return to normalcy.  In economic data, the Leading Economic Indicators gauge ticked up slightly while the Philadelphia Fed index, a measure of current economic activity was up slightly, but below analysts' estimates. The dollar gained back most of yesterday afternoon losses and markets are mostly down giving back a part of the surprise post-Fed rally.  Oil continues to fall heavily while gold is up about 1%.  We may well see another triple digit Dow, this time to the downside.  International markets are mixed.

Economic Journal - Wednesday, 3/18/2015

(as of 7:15 AM PST)

 

Stocks are off moderately in quiet trading.  The volatility of the last two weeks seems to be dampening in what has been a roller coaster ride.  Oil continues to fall with excess supply concerns and reports that US storage capacity for crude is nearing maximum capacity.  The US dollar is steady ahead of the important Federal Reserve Bank meeting, an event which could be a market mover.  Profit reports for some large international players are trending towards weakening earnings due to the strength of the US dollar.  Asian markets were higher overnight while Europe was mixed with the UK leading the way and the European Union struggling with how to handle the Greece financial crisis. 

Economic Journal - Tuesday, 3/17/2015

(As of 7:25 am PST)

After surging in yesterday’s session, US stocks are on the mend ahead of today’s kick-off of the Federal Reserve’s two-day policy setting meeting. Investors appear jittery ahead of the Fed’s meeting which will culminate tomorrow afternoon with a policy statement that will be under much scrutiny. One word is all investors are worried about…patience. Will the Fed remain patient on their timing of a rate hike, or will they remove ‘patient’ from their policy statement tomorrow, indicating they are ready to act? I suppose we’ll find out tomorrow. In the meantime, there’s a lot of other stuff happening around the world. European markets are in profit-taking mode today after a big run recently while Asian markets finished mostly higher. Economic data at home is light but mostly disappointing adding to the negative sentiment. Gold is flat today while oil continues to tumble, approaching $43 per barrel. The US dollar is down today while interest rates are lower as money flowed from stocks to bonds.