A wave of great earnings results fell on deaf ears on Thursday as anxious feet continued to seek the exits. In fact, the Dow Jones Industrial Average was the best performing major index. It underscored the rotation to safer names for money that would rather not be on the sidelines. Nonetheless, it is clear investors are concerned. Here are several reasons:

• The Election
• The Fed (not interest rate hikes but poor monetary management, including rate changes)
• Valuations and lack of a catalyst

According to FactSet, the trailing 12-month Price-Earnings (P/E) Ratio for the S&P 500 is at levels not seen in many years.  The 19.4 P/E is significantly above the 19-year average, although nowhere near the 24 that ushered in the last market crash.

I put more weight on the Forward Price to Earnings (PE) Ratio. It was clear coming into the week at 16.5 that it was worrisome for the Street based on recent trading reactions. This week, however, earnings guidance is making the forward P/E more palatable, although it’s still too high for old school investors.

This dilemma will only get worse today, after the latest round of earnings that will see a current stock legend take a big hit even as another legend edges higher.

Amazon’s (AMZN) earnings dried up (I couldn’t resist) coming in at $0.52 against consensus estimate of $0.78.  Just yesterday, my wife asked if the stock ever goes down, and mentioned she wants to buy the dip…”Oh, honey…”

On the other hand, Alphabet (GOOGL) posted earnings of $9.06, beating consensus by $0.43 as ad clicks increased by 33%.  Shares are higher as an initial reaction.  In addition, Expedia (EXPE) and LogMein (LOGM) popped on earnings.

Investing Key:

1. We don’t panic-ever
2. You never guess about tops and bottoms
3. You mitigate risks with higher cash levels and hedges
4. Keep your head on a swivel to buy dips when everyone else is panicking

Hang in there, and let’s not let impatience dictate our decision-making. 

Today’s Session

Stocks are poised to rebound at the open, but there is considerable anxiety even with the beat on 3Q GDP.

GDP Positives

• Exports +10%
• Business Structures Spending +5.4%
• Consumer +2.1
• Federal Government +0.5%

GDP Negatives

• Residential Structures -6.2%
• Imports +0.9%
• Business Equipment Spending -2.7%
• State /Local Government Spending -0.7%

This is the best number going back to 2014, and all the releases since were revised higher, so maybe there is a wind in the sails; but it comes with a degree of skepticism.   Consumer spending declined dramatically and residential structure should be much higher based on industry reports of demand.   I predicted the number would beat consensus in part as a so-called October Surprise, but not sure how much it moves the needle with voters, the market or the Fed.