MCD up $6 on a 9% drop in sales…but earnings were up. Last 4 quarters sales for Mcdonalds -3, -10, -11, -9 but the stock keeps performing.
Futures up but off the highs of a few hours ago.
China strong overnight. Look at the FXI tight along the 200 day.
A ton more earnings this week led by AAPL after the close tomorrow.
Random thoughts on everything:
Tomorrow is end of month…and then the sell in May and go away period. This is supposedly not a good period, especially in a mid-term year…but as always, we will let the market decide on that one. From 1950 to around 2013, DOW has had an average return of only 0.3% during the May to October period compared with an average gain of 7.5% during the November to April period, according to Forbes. Since 13, 14 and 17 did fine, especially 17.
This week we get things like Mnuchin in China, the Fed and Apple earnings. Of course, there is a ton more earnings to deal with.
We remain with our mantra of ping-pong back and forth action with the highs late January and the lows of Feb and the past couple of weeks. The 200 day continues to hold. It had better. We continue to believe it does not get broken at this juncture…but…
OILS remain best but thinking they look extended and tired here.
DEFENSE went from the penthouse to the outhouse in the past week off of earnings. No longer leading.
With BONDS having a near-term rally, UTILITIES and REITS better and trying to turn corner.
SEMIS remain the big worry as they continue to act horrid. INTC gapped up Friday and finished down.
FOREIGN MARKETS no great shakes but watching CHINA closely has it drifts down to the 200 day. Strength from this area will be a big help. We do believe China may hold the key.
AMZN up $140 in pre-market Friday and finishes in the 50s. Not sure what to make of it yet.
Got a few REGIONAL BANKS popping to new highs but bigger banks aint happening yet.
Seeing good action in a bunch of RETAIL. In fact, a few new highs. RESTAURANTS also better as CMG gaps to the upside.
After the run from the election to late January, what you are seeing is normal. Long consolidations serve to work off how extended and overbought market had become after such a move. After 2013-2014, major indices went into the doldrums for a good 18 months. We are not saying the same happens here but it is not out of the question. And of course, if the longer term support gets taken out, we will be talking about mid-high teens downside from the highs…but again, not there yet.
Amazing how a few mega-cap reactions can help market and turn the tide to a certain extent.
First…major indices again held long-term support as the S&P went right back to the 200 day.
Second…the NASDAQ/NDX is just back into the range…which we suspect has more to go. Other indices less so.
Yesterday, it was FB doing the job…great number but a sandbagged guidance. CMG also woke up.
Today, it is a big trifecta….AMZN, INTC, MSFT. AMZN numbers were over-the-top better than guidance. These moves have other stuff moving in sympathy. But while Qs are up 1.5% this morning, S&P up only .2% with DOW futures actually down a wee bit.
Will have a complete wrap-up this weekend.
Strong futures today off of FB sandbagging earnings but nevertheless, earnings very strong…in the 60s with sales almost up 50%.
Yesterday, another hold of the 200 day and longer-term support. BA helped big time…arguably the most important stock in the DOW and the NYSE.
Our theme remains. Major indices still in ping pong, back and forth mode. We continue to doubt lots of upside from these long term holds but will be open to anything.
ENERGY/OIL&GAS remain strongest area as oil prices remain strong.
And we are not even close to worried like others that the 10 year yield is over 3%.
Every time markets are hit, internals deteriorate…simple as that. More names, more leading names are breaking the 50 day. These are the names that held up best.
Also…CAT up $7…finishes down $10. MMM down $15. LMT down over $20. GOOGL down $50 on a beat. We try to take out all opinion and just look at the facts in front of us. Facts are more and more blow-ups. Facts are major indices rolling over after visiting the declining 50 day averages. Facts are fewer and fewer names working. More and more names rolling over. Blow ups and sharp reversals do not happen in bull markets. Not like this.
Still plenty of earnings to come out.
BA reports absolute blow-out numbers and is only up $5 after being down more yesterday. BA has been the most important name to the Dow move so must be watched.
Other gaps (but nothing huge) are NSC, TWTR, STM, IR…to the downside…TER, EW, DLB, WYNN.
SEMIS will be up on the open as TXN up $4, CREE up $3…but the SOX is down to the 200 day average with the SMH below it.
The good news remains MAJOR LONGER-TERM SUPPORT has not been broken. You know our thoughts if it does break.
NDX futures basically flat….S&P down a wee bit.
ENERGY/OILS remain strongest areas.
A few COMMODITY names were acting better and then FCX reports and crashes. Says a lot.
The 10 year yield trading above 3% this morning.