20 Nisan 2010 Salı

Positive Earnings Reports Roll In

The market reversed itself from yesterday's lows to help the S&P finish the session in positive territory. That buying interest has spilled over into today's session, with the major indexes all in positive territory so far.

Earnings reports have generally been positive so far, even thought some stocks that have reported strong earnings have seen their shares selloff on the news. Goldman Sachs (GS) and IBM both topped estimates, but their stocks are lower this morning. Ditto for the likes of Coca-Cola (KO) and JNJ. In the industrials sector, Eaton (ETN) and Illinois Tool (ITW) reported strong earnings and their stocks are actually higher on the reports.

Its really all about earnings right now, although there are other events moving markets. Europe's markets were higher this morning following news that Greece saw strong demand for its 2 billion euro auction of 3-month bills. Asian markets were mixed overnight.

The dollar is higher today, but commodities are rallying anway. Oil is higher near $83, while gold has bounced back above the $1140 level.

The 10-year yield is higher to 3.81%; and the VIX is -5.6% lower to 16.38 after a big negative reversal yesterday.

Trading comment: While the markets are bouncing, I still don't think that the full extent of the pullback was felt in just one trading session (Friday). I have not put cash to work yet, and am patiently watching for stocks that report strong earnings yet selloff anyway as good candidates to add to.

long IBM


*Note: Past performance is not indicative of future performance. Investing in securities involves risk, including the potential loss of principal invested. Investors should be aware that foreign investing involves special risks including grated economic, political, and currency fluctuation risks, which may be even greater in emerging markets. The price of commodities is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable international monetary and political policies. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. However, an investor should note that diversification cannot assure a profit or protect against a loss. There is no assurance that these movements or trends can or will be duplicated in the near future.

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