Economic Journal - Wednesday, 4/30/2014

(as of 7:25 AM PST)

Conflicting economic data has investors perplexed this morning and markets have started to the down side as a result.  1^st Quarter GDP was reported at a meager .1%, virtually unchanged, and below expectations of a 1% growth number.  The low number was most likely a result of the brutal winter weather in the Midwest and Northeast but was nonetheless sobering for markets.  On the positive side, the Chicago PMI, a key industrial measure, was a very robust reading of 63.  Any reading above 50 indicates growth, and 63 was seen as a very strong indicator.  The ADP private hiring number showed an increase of 200,000 jobs added.  While a strong number, it is usually discounted because it often is in conflict with what is really happening in the job market.  Gold and oil are off on the GDP number and the dollar is falling against most foreign currencies.  On a side note, the low GDP number may give the Federal Reserve more ammunition to keep economic stimulus flowing.  That has always been a stimulus to the markets and may once again stem the flow of red ink and allow markets to register a small gain. 

 

Economic Journal - Tuesday, 4/29/2014

(as of 7:25 AM PST)

With Ukraine tensions easing investors are turning to earnings reports for direction.  So far this morning markets like what they see with indexes up moderately.  Economic data has been tepid but not enough to create concern.  We seem to be entering a phase of the market where volatility is rising.  Yesterday we saw large swings all day and it looks like today may be more of the same.  Gold is near unchanged while oil is on the upswing despite excess supply issues.  Interest rates are stable.  With limited economic data available one would expect a quiet day, but there is a feeling that volatility will provide us with an adventurous journey as the day progresses.

Economic Journal - Monday, 4/28/2014

(As of 7:25 am PST)

 

Stocks opened on a mixed note but have been trending higher since, as investors waded through earnings reports and merger announcements from some big name pharmaceutical and telecomm companies.  Economic data is light, however a report on pending home sales helped to boost sentiment early.  Pending home sales rose more than expected, up 3.4% in March – the first gain in nine months. Markets got a lift as soon as the report was released at 7:00 am EST.  In company news, shares of Pfizer are up 3.5% as the drug company confirmed it has submitted a merger proposal to AstraZeneca.  Asian markets traded lower on the day while Europe is slightly higher heading into the final hour of trading. Russia-Ukraine tensions are still of major concern as the US announced additional sanctions on Russia earlier this morning.  Investors will be focused on earnings this week as well as the FOMC meeting where the Fed is expected to announce the next round of tapering.

Economic Journal - Friday, 4/25/2014

(as of 7:22 AM PST)

There is little doubt that Ukraine tensions are the major culprit in a moderate decline to start the market this morning.  But earning misses by some big names are also weighing down indexes.  Visa, Ford and Amazon are falling substantially after missing on earnings yesterday.  Of particular note is Amazon, which is down 8% on the day after sharing a report that had weak profit margins and warnings of future losses as it continues to build its international infrastructure.  There is not much positive news today and it would be no surprise to see a triple digit decline on the Dow, with the NASDAQ trailing even further down on a percentage basis.  Gold is up on Ukraine tensions and oil is down moderately as excess supply numbers trump Ukraine worries.  Fasten your seat belt; turbulence lies ahead.

 

Economic Journal - Thursday, 4/24/2014

(as of 7:15 AM PST)

Perceptions of a positive upside explosion this morning, based upon startling positive earnings data from Apple and Facebook, quickly unraveled as other factors interceded.  While Apple stock’s 8% gain propelled the NASDAQ to a fast start, up over 1%, fortunes reversed rapidly and most indexes are now negative.  Geopolitical tensions over Ukraine seem to be the main culprit driving investors to the sell side.  Hopes for a diplomatic solution to Russian aggression in that part of the world are fading and armed conflict between Russia and the fledgling Ukrainian government seems imminent.  The US has sent troops to Poland in a show of force, heightening tensions further.  In what seems trivial amidst the current turmoil, the US durable goods order came in very strong.  The prices of gold and oil are very volatile this morning.  Positive economic data sent gold down to start but international tensions have the commodity on the rise.  Data indicating an excess supply of oil caused an initial drop but, once again, international tension has resulted in gains as the morning has progressed.  Earnings season is in full swing today and would normally drive stock prices, but investors are turning attention to Eastern Europe and don’t like what they see.  It could be a rocky day.

 

Economic Journal - Wednesday, 4/23/2014

(As of 7:05 am PST)

 

It’s another busy earnings day on Wall Street.  Shares of Delta Airlines and Boeing lifted early after reporting positive earnings results, while shares of Facebook fell ahead of its earnings announcement.  Apple is also on the calendar to report today as investors are looking for earnings of $10.19 per share on $43.7 billion in revenue for the fiscal first quarter.  Economic news was light once again.  Global manufacturing PMI data is trickling in.  China’s flash PMI improved for the first time in 4 months but still remained in contractionary territory.  Most European manufacturing reports showed improvement but not enough to lift European equity markets.  And finally at home, the US flash manufacturing PMI slipped in April adding to the losses on the day.  Escalating tensions in the Russia-Ukraine conflict is adding to market worries today with most major international indexes in the red.  Gold is up slightly while oil is down nearly 2%.  Interest rates are lower as treasuries traded up.  After a 6 session winning streak on Wall Street, it looks like we may be in for some profit taking today.

Economic Journal - Tuesday, 4/22/2014

 (As of 7:20 am PST)

US stocks are inching higher extending their longest winning streak since last October as earnings results gave investors much to cheer about.  Economic data is light today with a report on existing home sales showing sales dipped slightly in March.  Investors shrugged the report with stock prices being driven higher by a slew of earnings reports from notable names.  Shares of Netflix rose 7% after posting strong results, while Harley Davidson also soared 7.5%.  Comcast rose 2.25% after reporting strong earnings while shares of McDonald’s declined 0.5% on falling profits.  Other notable names reporting today included Lockheed Martin, AT&T, Amgen and Yum Brands.  Earnings season has surprised some analysts with positive results bolstering an optimistic trade recently.  According to FactSet, so far 68% of the companies in the S&P500 have beat their earnings expectations.  It’s a longshot to call the recent uptick a rally, but momentum has certainly been to the upside.  Don’t be surprised to see some short term profit taking in the coming days.

Economic Journal - Monday, 4/21/2014

(as of 7:10 AM PST)

It is a quiet morning.  European markets are closed for Easter.  Activity is earnings related and for the most part is positive.  Indexes have opened up slightly positive.  Ukraine tensions are a factor suppressing investor enthusiasm but having no meaningful impact yet.  Gold continues to fall and oil is up slightly to start the day.  The dollar is rising as investors seek protection from potential international threats.  It appears that market action will continue to be driven by earnings reports for the near term.  

Economic Journal - Friday, 4/18/2014

The US Stock Market is closed today in observance of Good Friday.  The markets will be open for trading again on Monday, April 21st.  Have a great Easter weekend!

Economic Journal - Thursday, 4/17/2014

(As of 7:10 am PST)

 

US stocks are being driven by earnings in early action as investors weighed a mix of results from several big names.  Disappointing results from Google and IBM sent stocks lower at the open, with both stocks dropping nearly 4%.  Meanwhile, earnings beats from Morgan Stanley and Goldman Sachs weren’t enough to lift stocks.  In economic news, weekly jobless claims came in better than expected, ticking up slightly from the previous week.  A strong reading from the Philly Fed manufacturing index showed manufacturing activity soaring in April to the highest level since last September. The report wasn’t enough to lift stocks however, with all three indexes down since the open.  Asian markets finished the day mixed and Europe is tracking towards a positive finish.  Gold is down slightly while oil and interest rates are up.  Today’s market is certainly earnings driven with dozens of companies scheduled to report profits throughout the day.  

Economic Journal - Wednesday, 4/16/2014

(as of 7:30 AM PST)

Markets were strong out of the gate this morning.  There were some positive earnings results from tech companies Yahoo and Intel after the close yesterday and it set the stage for today’s moderate rally.  Economic data numbers were positive and that added to investor enthusiasm.  Housing starts were up as was industrial production.  After yesterday’s bizarre trading pattern for indices, we don’t really know what to expect as today’s action moves along.  Yesterday saw extreme swings in the market with the Dow down triple digits at one point only to finish up near triple digits.  The Nasdaq and SP500 saw similar swings.  It was quite a roller coaster.  Much of the action we should see could revolve around earnings season which is kicking in to high gear.  So far it has been good.  Gold and oil are near unchanged as are interest rates.

Economic Journal - Tuesday, 4/15/2014

(As of 7:25 am PST)

 

US stocks opened mixed but have since turned higher as investors cheered upbeat earnings reports from Dow components, Coca-Cola and Johnson & Johnson.  Coca-Cola reported Q1 revenue that beat forecasts and earnings that were in line as investors bid up shares by 3%.  Johnson & Johnson also beat on earnings while providing an upbeat forward profit guidance which helped lift shares nearly 1.5%.  Corporate earnings helped to overshadow a disappointing report on manufacturing out of the New York area.  The Empire State manufacturing index declined unexpectedly in April as the pace of manufacturing slowed.  Concerns out of China regarding China’s debt weighed on international markets while the Russia-Ukraine unrest has investors cautious around the globe.  Gold is taking a beating today, down 2.5% while oil and other commodities are lower.  Interest rates remain low.  Despite troubling news overseas and uninspiring data at home, US equities seem poised to continue their bull run with bouts of profit taking along the way.  

Economic Journal - Monday, 4/14/2014

(as of 7:10 AM PST)

It is a tentative start to markets this morning.  A strong retail sales report was enough to generate a moderate positive opening.  One gets the feeling that the gain is not going to hold.  Last week’s poor market performance has investors on edge.  Russian aggression in Ukraine is another source of uncertainty for investors.  Pro-Russian activists are looking to carve other parts of that country into sections that would presumably be annexed by Russia, just as Crimea was.  Reactions by the US and Europe have been very weak and seem to be an encouragement for further Russian aggression.  Gold is up moderately while oil is steady.  The US dollar is stronger.  The safe haven status of the US dollar is once again on display with what appears to be a mild flight to safety amidst the uncertainty.  Interest rates continue to be very low, with no evidence of upward pressure.

Economic Journal - Friday, 4/11/2014

 (As of 7:30 am PST)

US stocks are falling in early trading after the prior session’s sell-off which saw the Nasdaq record its worst day of the year.  Disappointing earnings results from JP Morgan Chase weighed on sentiment early.  Losses were kept in check momentarily after a positive report showed consumer sentiment rose more than expected in April.  Since then markets have accelerated to the downside.  Biotech and tech names are seeing the steepest selling as investors believe those sectors have overextended in the recent run up and some profit taking is in order.  Asian and European markets followed yesterdays selloff on Wall St. with steep losses of their own.  It looks like another dismal day is shaping up as we head into the weekend and a holiday shortened week next week.

Economic Journal - Thursday, 4/10/2014

(as of 7:00 AM PST)

 

There have already been two changes of direction in markets already this morning.  It could be a volatile day as investors digest the broad rally from yesterday.  The Federal Reserve Bank minutes provided the catalyst for that rally with analysts finding hints that economic stimulus will continue to be the order of the day well into 2015.  After the rally started, a number of bulls jumped into the headlines with rosy forecasts that turned a mild rally into a buying spree.  Tepid data from China brought optimistic investors back to ground level and markets started out down moderately.  A good job claims number reversed the downward trajectory, but only for a brief period.  It seems that markets are fatigued at this point and investors are looking for a reason to take profits and move to the sidelines.  If indexes can hold level for the day it would be a real positive, but expect a drift down as the day progresses.  Gold is a bright spot, up 1% while oil is down slightly.

Economic Journal - Wednesday, 4/9/2014

(as of 7:20 AM PST)

Things are calm this morning.  Stocks are up slightly after yesterday’s moderate rise.  Earnings season kicked off yesterday with a middling report from Alcoa.  Market direction will likely be driven by corporate profit results for the next few weeks.   While there seems to be a feeling that investors are looking for that next market correction, there is still a hint of bullish optimism.  Most problem declines this year have followed with surges to near record levels and the feelings are in the camp that we will see that pattern repeat.  Gold is down moderately after a three day rally, while oil is unchanged.  Interest rates are stable.  Continuing problems in Ukraine are also weighing negatively on markets.

Economic Journal - Tuesday, 4/8/2014

(As of 7:20 PST)

 

After a three day slide, US stocks have started today slightly higher.  Investors remain cautious however as Ukrainian tensions have picked up and weighed on global markets.  The economic data calendar is light today as investors looked ahead to tomorrow’s release of the Fed’s recent policy meeting minutes.  Also, despite being removed from the Dow Jones Industrial Average, aluminum maker Alcoa will unofficially kick off earnings season today after the closing bell.  Earnings forecasts are lackluster as winter weather, which lingered into the first quarter, is expected to impact results.  Global markets are mostly lower today.  Gold and oil are higher while interest rates are flat.  Negative sentiment is building into the market as macro events are taking center stage.  Russia-Ukraine tensions, the Federal Reserve taper, and uninspiring earnings forecasts are painting a gloomy picture just weeks before “sell in May, and go away.”  With markets roaring back to record levels after January’s selling, we’re seeing selling pressure that could slow this market down for awhile.     

Economic Journal - Monday, 4/7/2014

(As of 7:25 am PST)

 

The stock market added to selling pressure seen Friday as momentum tech stocks led the decline.  With little economic data to trade on, investors remained cautious after Friday’s selloff which saw the tech-heavy Nasdaq record one of its worst days of the year.  Momentum stocks such as Facebook, Amazon, and Tesla took the brunt of the selling Friday and have come back slightly today.  Tensions in Ukraine flared up again adding to today’s caution.  Russian equities traded broadly lower.  Asian markets finished lower and European markets are headed towards a down day.  The data calendar is light this week with markets eyeing Wednesday’s release of minutes from the most recent Fed policy meeting.  Markets are also rearing up for the start of earnings season with analyst forecasts coming in less than exuberant. Gold and oil are lower today as are interest rates as investors sought the safe-haven treasury.

Economic Journal - Friday, 4/4/2014

(as of 7:05 AM PST)

 

Investors are reacting in a ho-hum manner to the jobs report this morning.  The non-farm payrolls report showed an addition of 192,000 to the workforce, slightly below expectations, and the base unemployment rate moved up to 6.7% from 6.6%.  What is being ignored by investors is the fact that an adjustment to February numbers added another 20,000 jobs.  This middling report is just the kind the market usually welcomes; strong enough to show progress, but weak enough to keep economic stimulus flowing.  But in this frothy market it would be no surprise to see some profit taking as investors pause, looking for another catalyst to move indices higher.  Gold is up nearly 1% after several weeks of decline, while oil is up slightly with oil bear and bulls sparring about where it goes from here. Interest rates are steady, but there has been upward creep in mortgage rates for the last week. A feeling that negative sentiment is creeping into the mix might be enough to send stocks lower today.

Economic Journal - Thursday, 4/3/2014

(as of 7:30 AM PST)

 

Markets are flat this morning.  Economic data has generally been positive but lacking the catalyst to propel markets forward.  Jobless claims were up slightly, in line with expectations.  The US trade deficit was higher, indicating a negative for GDP estimates going forward.  The non-manufacturing ISM number came in strong.  This key data point reflects some 75% of the US economy, so the positive number is a strong indicator of future growth.   Conflicting data points to a quiet day in markets.  The good economic reports will likely prevail and lead to a solid but unspectacular gain.  Gold is down half a percent while oil is close to unchanged.  The US dollar is stronger against most other currencies.

Economic Journal - Wednesday, 4/2/2014

(As of 7:25 am PST)

 

After three consecutive days of solid gains, US equity markets are stalled at the unchanged line to start Wednesday.  A strong report on private sector job growth wasn’t enough to lift stocks early.  According to payroll processor, ADP, widespread improvement in the labor market was seen in March as the private sector added 191,000 new jobs, the fastest pace in 3 months.  Investors shrugged off the report, as we’ve often seen in the past, choosing to wait until Friday’s non-farm payrolls report from the Labor Dept. before declaring good news on the jobs front. Another positive report on factory orders, showed orders for goods produced in US factories rose 1.6% in February, ahead of expectations.  Again, the report hit the wires with a thud.  After the S&P500 broke through another intraday record Tuesday, markets feel a bit overheated.  February was an incredible run and March etched gains thanks to a final week surge.  The major indexes are slightly higher on the year, after recovering from January’s “correction”.  As we approach the “sell in May, go away” phenomenon it wouldn’t a surprise to see market volatility begin to pick up.   

Economic Journal - Tuesday, 4/1/2014

(As of 7:15 am PST)

 

Markets are continuing their move higher to start the second quarter of 2014.  Dovish comments from Fed Chairwoman Janet Yellen are propelling the moves higher.  In a conference yesterday, the Chairwoman said the central bank would maintain its support for the US economy for “some time to come”, a remark that markets perceived as accommodative.  No Fed speakers are scheduled to speak today with investors eyeing some key data that hit the wires at 7 am PST.  ISM Manufacturing edged up to 53.7 in March from 53.2 in February while a report on construction spending also rose slightly in the February period.  Investors are awaiting reports later this afternoon on truck and auto sales but momentum remains firm to the upside.  International indexes are higher while commodity prices are mixed.  Interest rates continue to rise as investors liquidated treasuries to purchase equities.  It looks like another positive day is in the making with the S&P500 looking to hit another record close.