We’re beginning to see an interesting trend this week, especially among individual companies.

The broad market is following the leads of companies that posted sloppy financial results and offered an iffy guidance, only to stumble out the gate before turning higher.

A month ago, the market would have been smashed with big names, such as Citigroup (C), JPMorgan Chase & Co. (JPM), and Delta Air Lines (DAL) missing earnings. Instead, the management of those companies were able to spin the bad news as temporary, suggesting a turn has taken place.

Yesterday, the management teams from Sherwin-Williams (SHW), JPMorgan, and Delta Air Lines all said business was better in January than in the fourth quarter of last year. 

For that, I am going to start calling this the “Weebles Wobble Rally” after the toy that made its debut in 1971. You could push them down, knock them down, and hold them down, but when you let them go, it was true: Weebles Wobble, but they don’t fall down.   

British Independence

Rule, Britannia! Britannia, rule the waves!

Britons never, never, never shall be slaves.

When Britain first, at heaven's command,

Arose from out the azure main,

This was the charter of the land,

And Guardian Angels sang this strain:

-Rule, Britannia! (Thomas Augustine Arne)

Perhaps one day, UK citizens will look back at yesterday the way Americans look back at the series of events where our young upstart nation began to fight back.

The final hurdle for the market yesterday was the British exit vote, which was worse than the direst predictions. In fact, the vote was the largest defeat for a British Prime Minister in modern history, and the first British parliamentary defeat of a treaty since 1864: (202 yes’s, 432 no’s).

The market got wobbly ahead of the vote, but it firmed up after as some believe there could be a new vote, and perhaps Brexit will fade away. I hope that’s not the case.

S&P 500 Breaking Out

Don’t look now, but the S&P 500 is doing a major breakout. Back in March of last year, the index formed a perfect double bottom at 2,600 and hovered above it a few times in the fall until it didn’t hold, and stocks tripped into complete free-fall. This is a huge development with the ultimate breakout coming with a close above 2,800.

Year-to-Date

• Russell 2000: +7.2%
• NASDAQ: +5.9%
• S&P 500: +4.1%
• Dow Jones Industrial: +3.2%

Tidbits

Esther George, President of the Kansas City Fed, urges the Fed to be patient with future rate hikes. What makes this notable is that she is a known hawk, but she joined the chorus of doves to assuage Wall Street concerns.

After the close, United Airlines (UAL) posted a strong earnings release, lifting the share in after-hours trading.

Today’s Session

It’s all about the banks this morning, and for the most part, they haven’t disappointed.

Goldman Sachs (GS) beat on revenue and crushed on earnings with $6.04 EPS, as all facets of the business performed better than expected, except FICC, which has been a universal disappointing for the industry this earnings period.

Bank of America (BAC) beat on the top and bottom lines as earnings were $0.07 better than consensus.

Blackrock (BLK) missed earnings consensus, but massive inflows into their iShares products of $81.4 billion from $33.7 billion is the headline.  Moreover, the company hiked its quarterly dividend to $3.30 from $3.13.

US Bank (USB) beat on revenue and earnings.

Another earnings report of not coming from a bank is United Airlines (UAL), which note only posted a strong quarter, but it upped FY2020 to $13.00, which was on the upper end of the range, as the street is at $11.94.

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