Economic Journal - Thursday, 4/30/2015

(as of 7:15 AM PST)

 

Stocks are on the defensive despite solid economic data this morning.  Jobless claims were at their lowest level in years, inflation appears well under control and the Chicago PMI, a key measure of industrial activity, swung to the positive.  Despite all the good news, markets are down across the board between 1/2 and 1%.  This may be another example of the disjointed relationship of 'good news' to market reaction.  The better the news the more likely the Federal Reserve Bank is likely to start interest rate increases.  Financial stimulus has held markets up for some time now and fears of a policy change make investors nervous.  The US dollar is recovering from early losses in what appears to be a 'risk off' market, where traders seek the safety of the US Treasuries.  Gold is falling heavily, giving back all of yesterday's gains while oil is holding steady after a nice rally to start the week.  Today's negative market reaction has investors on edge.  Buyers seem in short supply.  Perhaps the anomaly of 'sell in May and go away' is keeping many on the sidelines.  'Sell in May and go away' reflects many investors attitude that most market gains occur between October and May and that it is best to sit out the summer period.  Those who chose that strategy last year missed out on some sizable market gains.  Regardless, it looks to be a rocky day on Wall Street. 

Economic Journal - Wednesday, 4/29/2015

(as of 7:00 AM PST)

 

Stocks started out with a thud this morning opening down on a very disappointing 1st quarter GDP report.  In a report eerily similar to last year's 1st quarter, which was negative, GDP barely broke to the positive at .2% growth, well below analyst's estimates of 2.2%.  Last year GDP was bad because of a freak winter season of weather.  This year, weather can't be blamed as much.  But stocks have battled back to break even in early trading probably based on the contra-intuitive notion that what is bad for the economy is good for lower interest rates and continuing financial stimulus.  European markets are down across the board while Asia was mixed overnight.  Profit reports are mixed, but leaning to the downside overall this morning.  Oil is down...slowing economies need less fuel.  Gold is off on profit taking after a couple of strong performances.  Negative momentum seems to be building so expect stocks to revert back to the downside as the day progresses.

Economic Journal - Tuesday, 4/28/2015

(as of 7:10 AM PST)

 

The big news today is the response from Apple's corporate profit report which handily beat market expectations after yesterday's market close.  On top of the sterling profits Apple announced another huge stock buyback program.  This morning's response?...Ho-hum.  The buildup of excitement over the earnings release demanded an even greater performance, thus the stock is down slightly in early trading.  European markets are down moderately with some negative economic data showing weakness in Euroland.  Asia markets are mixed with China disappointing those hoping for another economic stimulus program by downplaying that course of action.  There are lots of corporate earnings reports coming out and they are a mixed bag with no significant market moving news.  Oil and gold are hovering around flatline.  Interest rates are stable while the dollar is generally down against most currencies.  Consumer confidence in the US fell this morning pulling stocks down.  A general negative pall seems to be the order of the day.

Economic Journal - Monday, 4/27/2015

(as of 7:15 AM PST)

 

Once again international markets are leading the way.  Asia is mostly up with the Shanghai market rising 3% on talk of more economic stimulus in China.  Europe is up on strengthening economic indicators and reports of easing financial pressure from Greece.  US markets are up across the board by about 1/2 percent.  This week will be a huge week for corporate earnings with 160 of the S&P 500 companies reporting.  The most influential report comes after market close today when Apple reports.  Apple usually surprises to the upside and its stock is surging this morning in anticipation.  Later this week the FOMC (Federal Open Market Committee) meets to discuss when to start raising interest rates.  That meeting usually moves the market, sometimes significantly.  All in all, it looks be a very busy week with lots of news to digest.   

Economic Journal - Friday, 4/24/2015

(as of 7:00 AM PST)

 

Positive earnings reports from some corporate heavyweights have the Nasdaq index on the rise and in record territory.  Both Amazon and Microsoft came out with earnings reports that excited investors and are driving prices higher.  Starbucks was another stellar performer and is up big.  It is a rally that is pretty much confined to individual stocks however with the broader Dow and S&P indexes not participating.  The Dow is down slightly while the S&P 500 Index is near flat-line.  International markets are mixed with the same old stories driving action today.  The dollar index is off today as well with word from China that they will allow their yuan currency to strengthen over the short term.  Oil and gold are both off marginally.  It is hard not to imagine markets rising with such positive earnings reports pulling markets up today.

Economic Journal - Thursday, 4/23/2015

(as of 7:00 AM PST)

 

International markets reversed course and are on the decline.  A weak manufacturing data point out of China is temporarily derailing the Asia bull we have seen over the last few weeks.  Worries persist in Europe over the Greek financial crisis and weaker economic data throughout Euroland has investors skittish.  In the US markets opened down marginally, but have struggled back to near unchanged.  Corporate profit reports are more of the same, with some profit beats, but companies continuing to post declining revenues.  The US dollar is off slightly while interest rates continue to be stable, near record lows.  Precious metals hover near flat-line while oil is in rally mode.  It looks like a quiet day is shaping up.

Economic Journal - Wednesday, 4/22/2015

(as of 7:10 AM PST)

 

Stocks are down slightly in a pattern of trade that looks very similar to yesterday's lackluster session. The housing retail sales report was very good, sales being up 6% from yesterday.  It wasn't enough to get investors excited however.  Corporate profit reports have been mixed with a continuing story of companies doing well on earnings but missing on revenues.  International markets are mixed.  The Shanghai market once again is the standout, adding to a very impressive year-to-date rally.  Oil is flat, but a overhang of supply could change that to the downside at any moment.  Gold continues to trade in a narrow range around the $1200 per ounce mark.  More than ever one gets the feeling that this market is being supported by economic stimulus efforts in Europe and China and that once these programs wind down, there could be a void that pulls stocks down dramatically.

Economic Journal - Tuesday, 4/21/2015

(as of 7:15 AM PST)

 

International markets surged overnight.  Both Asia and Europe seem to be optimistic about continuing financial stimulus programs.  The US markets started out very quietly with US investors exercising more caution after yesterday's surge.  Profit reports are coming in mostly positive but the pattern we are seeing is that revenue growth is lagging.  Indexes are mixed at this point with the Dow down slightly, the Nasdaq up a small amount and the S&P close to flatline.  Oil and precious metals are also close to even.  Merger activity is providing some excitement but it is shaping up as a very quiet day for US markets.

Economic Journal - Monday, 4/20/2015

(As of 7:00 am PST)

US stocks are rebounding after Friday’s session which saw the worst selloff for the US benchmarks in over three weeks.  China is making headlines once again after the Chinese central bank announced Sunday that it would reduce the reserve requirements for Chinese commercial banks, freeing up approximately $200 billion in available lending. The weekend’s easing measure comes just days after China announced new regulation that would cut down on margin lending at brokerages as well as give investors easier access to short Chinese stocks. China also issued communication around Friday’s moves, saying the measures were not aimed at cooling off markets but rather to maintain their “healthy development.” The weekend’s announcements from China sent most Asian markets lower Monday, while giving a boost to European markets and US markets. There is no US economic data to report today and the calendar remains light until Wednesday. Earnings season kicks up this week with reports from Facebook, McDonald’s, Microsoft, Starbucks and many others on the calendar to report.

Economic Journal - Friday, 4/17/2015

(As of 7:20 am PST)

US stocks are plummeting at today’s open as overnight developments in China sent most global equity markets lower. Fresh regulation out of China was announced early Friday which tightened the regulations on margin lending at major brokerages throughout China. Simultaneously, China’s two stock exchanges announced they would make it easier for traders to short Chinese securities, adding another 1,000 stocks to the list available for short selling. The move is seen as an effort to reign in an overheated Chinese market allowing investors easier access to betting on a stock market pullback. Asian markets finished the day mostly lower with index futures down heading into the weekend. European markets traded the China news lower while investors also continued to fret over a potential Greek default. Adding to the selling pressure Friday was an outage of worldwide Bloomberg trading terminals, which shut down access to trading for nearly 315,000 worldwide subscribers of the professional service.  US economic data is light today with a report on consumer sentiment beating expectations. With today’s selling it looks as though markets are set to finish with weekly losses for the first time in three weeks.

Economic Journal - Thursday, 4/16/2015

(As of 7:15 am PST)

Markets are pulling back some after yesterday’s advances which saw US markets reach near-record levels on better-than-expected earnings and a jump in oil prices. Today’s early losses come as investors sifted through uninspiring economic data while remaining cautious ahead of speeches from several Fed officials this afternoon. Data showed jobless claims jumped last week to 294,000 from 282,000 in the prior week. Also a report on housing showed housing starts rose to an annual rate of 926,000 in March, slower than the 1.04 million forecasted. Building permits, a sign of future demand, also fell below expectations. On a positive note, the Philadelphia Fed manufacturing index rose above expectations for April. Investors are also consuming several earnings reports in the early going. Goldman Sachs and Citigroup both reported beats on the bottom line, while Citigroup revenues fell below expectations. UnitedHealth Group raised its forward outlook for 2015 before the bell, while Philip Morris International reported an earnings miss, but also raised forecasts for 2015. In overseas action, European stocks wobbled down the stretch as investors kept close eyes on the Greek debt situation, while Asian markets finished the day mostly higher. Oil is down after yesterday’s surge while gold trades flat.