It was another rollick week for the market, but it was a lot more stable than preceding weeks, which suggest we could see equilibrium soon.  The question then would be the direction of market bias and near-term catalysts. We know earnings will continue to set the tone, although guidance provides underlying bids and support to post-earning season rallies.

With 51 companies in the S&P 500 reporting thus far, results are living up to expectations but maybe not to hype.

Revenue

• 68.6% beat
• Long term average 60%
• Four-week average 73%

Earnings

• 84.3% beat
• Long term average 64%
• Four quarter average 77%

I think its fine that the degree of revenue and earnings beats are closer to estimates than recent trends.  It speaks to more honest research, although sandbagging by management and the street will also provide a cushion. For me, guidance has been solid considering all the excuses management could use, but instead, most are facing the music, good or bad.

The earnings of the week came from Proctor and Gamble (PG), which displayed pricing power that most had assumed was gone for the foreseeable future.

The Fed Comment of the Week

Key observations from Dallas Fed President Robert Kaplan:

• U.S. economy is "basically" meeting the Fed's dual mandate
• Skeptical about wage growth from current levels
• U.S. Economy would be well-served to reform immigration rules similar to those in Canada
• Not so worried about a financial crisis or imminent recession because of the strong consumer sector

I’m reading Kaplan’s comments as a sign the Fed will not derail this economy, or rally, although they might attempt from time to time to jawbone stocks lower. 

Today’s Session

There is too much uncertainty, and the bias is still to the downside.  We are looking for a failed rally that resurrects itself, and then moves higher.