It appeared yesterday that the market was looking to lay down for a moment, but it held at the last minute, as all but two sectors finished in the green.

But earnings misses continue to be punished…badly!

Breadth

Advancers crushed decliners, and new highs surpassed new lows as up volume drawled down the volume.

All styles were higher, but small-cap value enjoyed a rare session on top of the heap.

Health Care (XLV) struggled, but Consumer Discretionary (XLY) took the largest hit, as shown on the Heat Map.

Gushing

Crude oil is beginning to gush, and there is much room for the upside once momentum picks up. I also like the rate of change. The signs are nascent, and there have been false alarms, but crude oil acts better.

Moreover, hedge funds have massive short positions that might have to unwind quickly. I like what’s happening in the Materials (XLB) as well.

Sox Get Socked

After the close, Intel (INTC) posted results that beat the consensus on revenue and earnings.

But the guidance was abysmal.

• Revenue: $12.2 to $13.2 billion consensus $14.2 billion
• Earnings: $0.13 consensus $0.34

@Don7Spy

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Today’s Session

Lot of data out this morning, including a huge spike in personal spending and core PCE declining to 2.9% from 3.2%.

Spending came at the expense of savings, which plunged to 3.7%.

Inflation Watch

The story form PCE data is core edging below 3.0% to 2.9%.

Annualized Trends

• 3-month 1.5%
• 6-months 1.9%

These numbers have many suggesting the Fed can start cutting right now.

But the CME FedWatch has seen the chance of the March rate cut ease in the initial response to all the data.

 

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