Morning Commentary
Yesterday was another difficult session, although it did not start out that way; stocks galloped out the gate on the coattails of Apple and industrials, Boeing and U.S. Steel. However, the rally tripped over a sizeable speed bump that might actually represent a speed bump for the entire nation. Commercial crude oil inventory surged, coming in at almost 9 million barrels or 100% higher than anticipated. How much longer can we call this a story of supply, and not a hint at a flagging demand from a flaccid economy?
+8.9 million 406,700,000 |
After the Federal Reserve finished its Federal Open Market Committee (FOMC) gathering and issued its typical release, stocks slowly began to slide. That slide mirrored the proverbial snow-into-boulder scenario as selling intensified and beget even more selling. Buyers made a stand at the plus/minus line a couple of times before giving up the ghost. The result was a serious two-day drubbing.
The reason for the slide was bond yields, which tripped hard and in many respects, inexplicably. The bond rally has been defiant and it continues to confound the experts. I must admit that I am surprised. On the one hand, yields are down; on the other hand, it is not unusual for selling to trigger selling. However, once key technical marks are eclipsed, a certain bias is established- in this case, due south.
Between that horrible durable goods report, the cascade of corporate warnings, and the mounting crude inventories, it is hard to be convinced that this is a robust recovery.
Thus, I think in general that stocks got ahead of themselves on a short-term basis, so this cleaning process serves a purpose. Remember, you are investing in individual stocks, so an oversold market can only act as an anchor for so long.
Moreover, there are unresolved questions about the economy and the market. I have never allowed the hours after the FOMC announcement to factor into my decision-making; the day after is the one that counts.
Today’s Session
For the week ended January 24th, initial jobless claims made a nice turn around, coming in at 265,000. This is significantly lower than the consensus estimate for 300,000 and the upwardly revised 308,000 (from 307,000) that incurred in the prior week… proof that unemployment claims can be volatile as well, especially after the Martin Luther King holiday. Continuing claims for the week ended January 17th are also lower as they fell by 71,000 to 2.385 million. 265,000 initial claims is the lowest reading since April 2000 and although the reading is impressive, the real question is, will it hold the market up today?
Below are some of the major companies that reported earnings yesterday afternoon and this morning.
Company |
EPS |
Consensus |
Revenue ($M) |
EPS Guidance |
EPS Consensus |
|
ATK* |
3.02 |
2.89 |
$1,251 |
- |
FY15 11.50 |
|
FB* |
0.54 |
0.48 |
$3,851 |
- |
FY15 1.92 |
|
LVS |
0.92 |
0.78 |
$3,416 |
- |
FY15 3.40 |
|
QCOM |
1.34 |
1.25 |
$7,100 |
FY15 4.75-5.05 |
FY15 5.20 |
|
SWFT |
0.55 |
0.48 |
$1,140 |
FY15 1.64-1.74 |
FY15 1.70 |
|
BABA |
0.81 |
0.76 |
$4,219 |
- |
FY15 2.17 |
|
COH |
0.72 |
0.66 |
$1,219 |
- |
FY15 1.87 |
|
CL |
0.76 |
0.74 |
$4,221 |
- |
FY15 3.06 |
|
DOW |
0.85 |
0.69 |
$14,384 |
- |
FY15 3.08 |
|
F |
0.26 |
0.23 |
$33,800 |
- |
FY15 1.61 |
|
HOG* |
0.35 |
0.33 |
$1,031 |
- |
FY15 4.38 |
|
HSY |
1.04 |
1.06 |
$2,010 |
FY15 4.30-4.38 |
FY15 4.46 |
|
JBLU |
0.26 |
0.24 |
$1,446 |
- |
FY15 1.45 |
|
POT* |
0.49 |
0.47 |
$1,902 |
FY15 0.45-0.55 |
FY15 2.12 |
|
RTN |
1.71 |
1.81 |
$6,143 |
FY15 5.54-5.64 |
FY15 6.69 |
|
SWK |
1.56 |
1.51 |
$2,983 |
FY15 5.65-5.85 |
FY15 6.01 |
|
TWC |
2.03 |
2.08 |
$5,790 |
- |
FY15 8.16 |
*Open WSS Ideas
Comments |
If there is a 1,000 people analyzing where the bottom is, in the crude price. You have a 1,000 different answers.....To me you need capitulation IE: everyone throws in the towel and sells. Where is that nobody knows. If you forced me to guess about $38. Mike T on 1/29/2015 8:45:55 AM |
Charles, Why doesn't the "dufus" in the WH start filling our oil reserves with the excess oil we are producing? Now would be a good time. William S. Brown on 1/29/2015 10:55:42 AM |
Keep watching Dr. Copper. Let's see if the Red Kite can keep flying. Charlie Brown was a piker! Steve on 1/29/2015 11:43:47 AM |
2 Things: #1 - When the bottom comes in oil, what investments will rebound the best? We must be prepared!! #2 - There is much talk about how the President reversed course on taxing 529 accounts thinking only the rich had 529 accounts. When will we ever get a definition on "The Rich"? What dollar amount of income/assets is considered "The Rich". Can't wait to hear the Charles Payne wisdom on these subjects! Richard Bucher on 1/29/2015 12:23:38 PM |
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