The market opened higher this morning, but quickly reversed such that the S&P 500 and Nasdaq have reversed into negative territory. But the Dow is still higher as industrials and financials outperform.
The Nasdaq was lower last week which ended its winning streak at 14 weeks. My tracking spreadsheet doesn't go back far enough to show another streak that has lasted that long, but maybe someone else can tell me the last time that occurred.
Apple (AAPL) and Priceline (PCLN) have both rolled over this morning, and Google (GOOG) has broken below its 50-day average. So the Nazz continues to correct and is lagging all of the other major indexes this morning.
Asian markets were lower across the board overnight. I would have expected Europe to be lower, but their markets are actually positive despite Spanish yields moving back above the 6.00% level.
In economic news, retail sales came in better than expected at 0.8% for March, well above the 0.3% estimate. But the Housing Market Index for April fell to 25 from 28 the prior month. It was the first drop in 7 months, but I have heard of weakness in other indexes as well.
In earnings, Citi (C) reported disappointing earnings results but its stock is still higher on the session. This is the opposite reaction we saw last week in JPM and WFC who beat estimates but their stocks fell. All of the above financials are higher today.
The euro is lower vs. the dollar today, which is weighing on commodities. Oil prices are slightly lower near $102, and gold has pulled back to $1650.
The 10-year yield is sinking further to 1.96%. And the VIX had bounced above the 20 level on the early reversal in stocks this morning, but is has since eased back a little to 19.53.
Trading comment: I don't like big up opens in the market that are quickly sold. That is not bullish action. Speaking of bullish action, last week's rally attempts came on lighter volume vs. the down days in the market, so we need to see that pattern reverse. Bulls will want to see the market rally on rising volume, not falling. We have also lost the AAPL/PCLN leadership combo in the Nasdaq. My guess is the S&P is going to take the lead for a bit, but big picture I think the market needs to spend some more time consolidating its multi-month runup over the last several months and that doesn't happen overnight. The wildcard is obviously Europe. If Spanish yields continue to rise and the market gets spooked, then we could see a deeper correction like we did last year.
KAM Advisors has long positions in AAPL, GOOG, JPM, PCLN, and WFC
16 Nisan 2012 Pazartesi
13 Nisan 2012 Cuma
Keep A Close Eye On Spain
The market is lower this morning, despite positive action in Asia overnight and a host of better than expected earnings reports.
Asian markets were up across the board last night even though China posted a GDP number that was below expectations. Chinese GDP for Q1 is estimated to have grown 8.1%, which is below the 8.4% expected. Most likely the reason Asian markets didn't selloff is that investors expect lower GDP for China to give the govt. cover to ease monetary policy more.
The good mood in Asian overnight didn't carryover to Europe this morning, where markets are down. The big concern once again is Spain, where bong yields have been rising recently and stocks have been swooning. Recent data shows that net borrowing by Spanish banks from the ECB surged to 228 billion euros in March from 152 billion in February. If Spain spirals out of control like Greece I would expect global markets to come under pressure.
In economic news in the US, the Univ. of Michigan Consumer Sentiment survey declined to 75.7 in April from 76.2 the prior month. But April's decline was the first in the survey since August 2011.
The dollar is rallying vs. the euro today, and that is weighing on commodities. Oil prices have fallen back to $103 and gold prices are lower near $1668. Copper and silver prices are lower as well.
The 10-year yield is back below the 2.00% level at 1.99%. And the VIX is up 9% to 18.75. I suspect if the market continues to selloff we will see the VIX get back above the 20 level.
Trading comment: There is an old adage in the market that says its not the news that's important, its the reaction in the stock. So it is not a very good sign that all of the companies that beat estimates last night (JPM, WFC, and GOOG) are all lower this morning. I don't want to make too much out of a single day's action, but if this turns into a trend it won't be good. On Tuesday I said that the market was grossly oversold and due for a bounce. We got that expected bounce the last 2 days, but on relatively light volume. Currently the S&P 500 is testing that 50-day average support again near the 1376 level. If we can't hold that support, it is likely that the market will correct more.
KAM Advisors has long positions in GOOG, JPM, and WFC
Asian markets were up across the board last night even though China posted a GDP number that was below expectations. Chinese GDP for Q1 is estimated to have grown 8.1%, which is below the 8.4% expected. Most likely the reason Asian markets didn't selloff is that investors expect lower GDP for China to give the govt. cover to ease monetary policy more.
The good mood in Asian overnight didn't carryover to Europe this morning, where markets are down. The big concern once again is Spain, where bong yields have been rising recently and stocks have been swooning. Recent data shows that net borrowing by Spanish banks from the ECB surged to 228 billion euros in March from 152 billion in February. If Spain spirals out of control like Greece I would expect global markets to come under pressure.
In economic news in the US, the Univ. of Michigan Consumer Sentiment survey declined to 75.7 in April from 76.2 the prior month. But April's decline was the first in the survey since August 2011.
The dollar is rallying vs. the euro today, and that is weighing on commodities. Oil prices have fallen back to $103 and gold prices are lower near $1668. Copper and silver prices are lower as well.
The 10-year yield is back below the 2.00% level at 1.99%. And the VIX is up 9% to 18.75. I suspect if the market continues to selloff we will see the VIX get back above the 20 level.
Trading comment: There is an old adage in the market that says its not the news that's important, its the reaction in the stock. So it is not a very good sign that all of the companies that beat estimates last night (JPM, WFC, and GOOG) are all lower this morning. I don't want to make too much out of a single day's action, but if this turns into a trend it won't be good. On Tuesday I said that the market was grossly oversold and due for a bounce. We got that expected bounce the last 2 days, but on relatively light volume. Currently the S&P 500 is testing that 50-day average support again near the 1376 level. If we can't hold that support, it is likely that the market will correct more.
KAM Advisors has long positions in GOOG, JPM, and WFC
GE's Jack Welch Blasts Obama's Leadership
President Obama’s “divide-and-conquer” approach isn’t what great leaders do, Jack Welch said Thursday on “The Kudlow Report”.
The renowned former General Electric CEO chided the president for blaming others for economic woes.
“It was the insurance executives in health care. It was the bankers in the collapse. It was the oil companies as oil prices go up. It was Congress if things didn’t go the way he wanted. And recently it’s been the Supreme Court,” he said.
“He’s got an enemies list that would make Richard Nixon proud.”
Welch, who helmed GE for 21 years and founded the Jack Welch Management Institute at Strayer University, penned an op-ed article for Reuters with wife Suzy Welch this week in which he tackled the idea of Obama’s enemies list.
“Surely his supporters must think this particular tactic is effective, but there can be no denying that the country is more polarized than when Obama took office,” Welch wrote, making a case for presumptive Republican presidential nominee Mitt Romney.
“Without doubt, Romney is not the model leader (his apparent lack of authenticity can be jarring), but he has a quality that would serve him well as president — good old American pragmatism,” he wrote. “Perhaps that’s the businessman in him. Or perhaps you just learn to do what you’ve got to do when you’re a GOP governor in the People’s Republic of Massachusetts or the man charged with salvaging the scandal-ridden Salt Lake City Olympics. If Romney’s long record suggests anything, it’s that he knows how to manage people and organizations to get things accomplished without a lot of internecine warfare.”
In 1981, Welch became GE’s youngest CEO, and increased its market value by $387 billion, making it the world’s most valuable company. But the move came in part by slashing GE’s workforce by more than 100,000 workers, earning him the nickname he despised, “Neutron Jack,” a reference to the bomb designed to eliminate people while leaving buildings intact.
Welch argued that “great leaders are interested in coalescing” the way they would run a company.
“You don’t have one division pinned against the other,” he said. “You try to get the whole company pull together.”
I asked him whether he thought Romney could win the White House. “Absolutely,” he said. “It’d be great for the country. We’d be a stronger country. We’d have more jobs. We’d have more people getting a piece of the pie. And we wouldn’t have this divisive nature that we have with this president, screaming at one group and then screaming at the next group in a high-pitched voice.
“He was in Florida this week screaming and yelling about rich people. He went after the Supreme Court. We’ve got to stop this, Larry.”
Earlier in the interview, Welch said he was seeing modest growth in short-cycle sectors such as food and chemicals, along with “real strength” in non-residential construction and infrastructure.
“While the economy was strong, it wasn’t accelerating the way I thought it would after the fourth quarter,” he said.
Tailwinds included consumer confidence and the Federal Reserve.
“On the negative side, though, we’ve got gasoline prices, we’ve got Europe, we don’t know where China is going and we’ve got tax increases right around the corner,” he said.
The renowned former General Electric CEO chided the president for blaming others for economic woes.
“It was the insurance executives in health care. It was the bankers in the collapse. It was the oil companies as oil prices go up. It was Congress if things didn’t go the way he wanted. And recently it’s been the Supreme Court,” he said.
“He’s got an enemies list that would make Richard Nixon proud.”
Welch, who helmed GE for 21 years and founded the Jack Welch Management Institute at Strayer University, penned an op-ed article for Reuters with wife Suzy Welch this week in which he tackled the idea of Obama’s enemies list.
“Surely his supporters must think this particular tactic is effective, but there can be no denying that the country is more polarized than when Obama took office,” Welch wrote, making a case for presumptive Republican presidential nominee Mitt Romney.
“Without doubt, Romney is not the model leader (his apparent lack of authenticity can be jarring), but he has a quality that would serve him well as president — good old American pragmatism,” he wrote. “Perhaps that’s the businessman in him. Or perhaps you just learn to do what you’ve got to do when you’re a GOP governor in the People’s Republic of Massachusetts or the man charged with salvaging the scandal-ridden Salt Lake City Olympics. If Romney’s long record suggests anything, it’s that he knows how to manage people and organizations to get things accomplished without a lot of internecine warfare.”
In 1981, Welch became GE’s youngest CEO, and increased its market value by $387 billion, making it the world’s most valuable company. But the move came in part by slashing GE’s workforce by more than 100,000 workers, earning him the nickname he despised, “Neutron Jack,” a reference to the bomb designed to eliminate people while leaving buildings intact.
Welch argued that “great leaders are interested in coalescing” the way they would run a company.
“You don’t have one division pinned against the other,” he said. “You try to get the whole company pull together.”
I asked him whether he thought Romney could win the White House. “Absolutely,” he said. “It’d be great for the country. We’d be a stronger country. We’d have more jobs. We’d have more people getting a piece of the pie. And we wouldn’t have this divisive nature that we have with this president, screaming at one group and then screaming at the next group in a high-pitched voice.
“He was in Florida this week screaming and yelling about rich people. He went after the Supreme Court. We’ve got to stop this, Larry.”
Earlier in the interview, Welch said he was seeing modest growth in short-cycle sectors such as food and chemicals, along with “real strength” in non-residential construction and infrastructure.
“While the economy was strong, it wasn’t accelerating the way I thought it would after the fourth quarter,” he said.
Tailwinds included consumer confidence and the Federal Reserve.
“On the negative side, though, we’ve got gasoline prices, we’ve got Europe, we don’t know where China is going and we’ve got tax increases right around the corner,” he said.
12 Nisan 2012 Perşembe
Fickle Fun
I'm now in Missoula, Montana. Mark Sundeen, his fiance, Cedar, and I have been on the road together, doing this book tour thingy in Los Angeles, Colorado (Grand Junction, Durango, Paonia, Telluride), and Utah (Moab, Salt Lake City) for the past few weeks, with a few radio interviews sprinkled in. We've been amazed at the attendance, reception and open-heartedness of people at all the events, so far - with hugs and tears. Mark and I have also been running into long lost friends coming out of the woodwork through all this.
We even stayed with Mark's family in LA, and I've finally been able to learn more about Mark's life. Not so one-sided as it's been ;-)
Then my family. My parents even attended at the Grand Junction, Colorado presentation at the library. I felt very moved seeing them there, and hearing their comments. The Man Who Quit Money contains things I previously only told my closest friends and family, so I was feeling quite vulnerable having it published for all the world to read. And I was feeling most nervous about how my parents would receive it, even though we had discussed most everything in it. But they keep proving, over and over, their unconditional love.
We are getting ready to do our northwestern tour. We have a reprieve in Missoula until April 18th, the Quit Money Day panel discussion here at the Missoula Public Library. After that we head west, doing book events up and down the west coast, including Portland, Seattle, and possibly San Francisco. We scratched Vancouver off our list since I can't cross the border legally without any form of ID.
I'll try to list the dates and times of upcoming events when they are confirmed.
So how am I taking this personally?
Over the past couple years, as Mark was writing the book, I was wary of my own ego, how I'd handle all this. But then I just decided it's like everything in life: accept it and enjoy it as it comes, then let it pass. The funny thing about experiencing this as I'm older (soon to be 51) is that I have a strong sense of the fickle impermanence of life--my own mortality. Our earth is a teeny-tiny, passing vapor in a galaxy that takes millions of years to make a single revolution. Honestly, this really doesn't feel like such a big deal as I'd thought it would. But it's fun, and why should it not be? Like everybody, I've had too many childhood dreams at night of being a big star or a hero, to wake up and realize it was a fickle dream. And I would wake up to a new day as just a child, no longer a hero, but could now romp and skip with neighbor kids, and with my brothers and my sister in the woods. Enjoy time in the spotlight, enjoy watching it pass away - that's what dreams are for. "Everything is beautiful in its time," and we realize this when we don't cling, don't possess. We then know the blooming of a flower is no less beautiful than its wilting, its bowing to the ground, releasing seeds for another spring, another generation. Okay, I'm getting maybe too romantic here. Life sucks too. But the suckiness of life is part of the fun, too, when savored, like delicious hot burning peppers in Mexican food, and makes for the best stories to tell grand kids.
My computer time is unpredictable these days, and usually not much time, so maybe I'll start writing shorter blog posts, more frequently?
We even stayed with Mark's family in LA, and I've finally been able to learn more about Mark's life. Not so one-sided as it's been ;-)
Then my family. My parents even attended at the Grand Junction, Colorado presentation at the library. I felt very moved seeing them there, and hearing their comments. The Man Who Quit Money contains things I previously only told my closest friends and family, so I was feeling quite vulnerable having it published for all the world to read. And I was feeling most nervous about how my parents would receive it, even though we had discussed most everything in it. But they keep proving, over and over, their unconditional love.
We are getting ready to do our northwestern tour. We have a reprieve in Missoula until April 18th, the Quit Money Day panel discussion here at the Missoula Public Library. After that we head west, doing book events up and down the west coast, including Portland, Seattle, and possibly San Francisco. We scratched Vancouver off our list since I can't cross the border legally without any form of ID.
I'll try to list the dates and times of upcoming events when they are confirmed.
So how am I taking this personally?
Over the past couple years, as Mark was writing the book, I was wary of my own ego, how I'd handle all this. But then I just decided it's like everything in life: accept it and enjoy it as it comes, then let it pass. The funny thing about experiencing this as I'm older (soon to be 51) is that I have a strong sense of the fickle impermanence of life--my own mortality. Our earth is a teeny-tiny, passing vapor in a galaxy that takes millions of years to make a single revolution. Honestly, this really doesn't feel like such a big deal as I'd thought it would. But it's fun, and why should it not be? Like everybody, I've had too many childhood dreams at night of being a big star or a hero, to wake up and realize it was a fickle dream. And I would wake up to a new day as just a child, no longer a hero, but could now romp and skip with neighbor kids, and with my brothers and my sister in the woods. Enjoy time in the spotlight, enjoy watching it pass away - that's what dreams are for. "Everything is beautiful in its time," and we realize this when we don't cling, don't possess. We then know the blooming of a flower is no less beautiful than its wilting, its bowing to the ground, releasing seeds for another spring, another generation. Okay, I'm getting maybe too romantic here. Life sucks too. But the suckiness of life is part of the fun, too, when savored, like delicious hot burning peppers in Mexican food, and makes for the best stories to tell grand kids.
My computer time is unpredictable these days, and usually not much time, so maybe I'll start writing shorter blog posts, more frequently?
Early Look: Waiting On Google
The market is pushing higher in early trading, adding to its oversold bounce that started yesterday. The S&P 500 is back above its 50-day average, which comes back into play around 1374. Bulls will be looking for the index to hold above that level.
In earnings news, tech giant Google (GOOG) reports earnings after the close tonight. Consensus estimates are for EPS of $9.64 on revenues of $10.58 billion. Last quarter, GOOG missed estimates with its earnings report and the stock gapped lower the next day. Let's hope they have a better handle on their financials this time. The stock is trading at roughly 15x 2012 estimated earnings, so it's not very expensive at current levels.
In economic news, core PPI data showed a 0.3% increase month over month, slightly above expectations. Also, jobless claims came in higher than expected at 380,000. But continuing claims declined.
Overnight Asian markets were higher, led by a 1.8% bounce in China. Europe's markets are mostly lower this morning.
The euro is higher vs. the dollar, which is helping commodities. Oil prices are rallying to $103.80, and gold prices are up to $1676. Copper and silver prices are getting a pop as well.
The 10-year yield is up a touch to 2.03%; and the VIX is down -8% currently to 18.41. Yesterday's early dip in the VIX reversed itself by the close and the VIX rallied back up to 20. We'll see if it can stay down on day 2.
Trading comment: Yesterday's bounce came on somewhat lighter volume, but it was still a good rally attempt. Bulls will be watching for some follow through to come on higher volume, and also for one of the minor growth indexes (like the S&P midcap 400) to recapture its 50-day average. Most leading growth stocks haven't had too much damage on the charts and are consolidating. LNKD is close to breaking out again, and could benefit from the social media hype that is picking up as Facebook readies for their IPO next month.
KAM Advisors has long positions in GOOG and LNKD
In earnings news, tech giant Google (GOOG) reports earnings after the close tonight. Consensus estimates are for EPS of $9.64 on revenues of $10.58 billion. Last quarter, GOOG missed estimates with its earnings report and the stock gapped lower the next day. Let's hope they have a better handle on their financials this time. The stock is trading at roughly 15x 2012 estimated earnings, so it's not very expensive at current levels.
In economic news, core PPI data showed a 0.3% increase month over month, slightly above expectations. Also, jobless claims came in higher than expected at 380,000. But continuing claims declined.
Overnight Asian markets were higher, led by a 1.8% bounce in China. Europe's markets are mostly lower this morning.
The euro is higher vs. the dollar, which is helping commodities. Oil prices are rallying to $103.80, and gold prices are up to $1676. Copper and silver prices are getting a pop as well.
The 10-year yield is up a touch to 2.03%; and the VIX is down -8% currently to 18.41. Yesterday's early dip in the VIX reversed itself by the close and the VIX rallied back up to 20. We'll see if it can stay down on day 2.
Trading comment: Yesterday's bounce came on somewhat lighter volume, but it was still a good rally attempt. Bulls will be watching for some follow through to come on higher volume, and also for one of the minor growth indexes (like the S&P midcap 400) to recapture its 50-day average. Most leading growth stocks haven't had too much damage on the charts and are consolidating. LNKD is close to breaking out again, and could benefit from the social media hype that is picking up as Facebook readies for their IPO next month.
KAM Advisors has long positions in GOOG and LNKD
11 Nisan 2012 Çarşamba
Trying To End The Losing Streak
The S&P 500 is coming off its longest losing streak since last November at 5 days. The market is bouncing in early trading, with the SPX trying to regain its now overhead 50-day average.
Overnight trading was weak in Asia following weak action in US markets and lingering concerns about sovereign European debt. But the action in Europe took a decidedly positive tone this morning after a successful auction of short-term bills in Italy. This helped drive yields lower across the periphery of Europe.
In corporate news, Alcoa kicked off earnings season last night with a strong report. AA topped consensus estimates handily and also raised its growth forecast for the global aerospace market.
On the flipside, Nokia lowered Q1 guidance and its stock is getting hit.
The euro is higher this morning, but commodities are mixed. Oil prices are higher near $101.70 while gold prices are slightly weaker at $1660. Copper and silver are also mixed.
The 10-year yield is seeing a little bounce to 2.03%. And the VIX is falling -7.5% this morning below the 19 level as some of yesterday's fear comes out of the market.
Trading comment: A couple of different pictures for the SPX and Nasdaq in terms of their 50-day averages. The SPX broke through its 50-day support yesterday and today is trying to recapture that key support level (watch 1373). As for the COMP, it closed right at its 50-day support yesterday and today is bouncing higher from those levels (watch 2992). Looking at many of the other growth stocks that have been leading the market, most of them are still holding up. A handful have broken below their recent uptrend lines but are still trading above their 50-day averages. That said, yesterday was another distribution day (read: high volume selloff) in the market and adds to the number of distribution days we have seen in recent weeks. As such, traders should be in defensive mode and looking to protect profits and raise cash.
Overnight trading was weak in Asia following weak action in US markets and lingering concerns about sovereign European debt. But the action in Europe took a decidedly positive tone this morning after a successful auction of short-term bills in Italy. This helped drive yields lower across the periphery of Europe.
In corporate news, Alcoa kicked off earnings season last night with a strong report. AA topped consensus estimates handily and also raised its growth forecast for the global aerospace market.
On the flipside, Nokia lowered Q1 guidance and its stock is getting hit.
The euro is higher this morning, but commodities are mixed. Oil prices are higher near $101.70 while gold prices are slightly weaker at $1660. Copper and silver are also mixed.
The 10-year yield is seeing a little bounce to 2.03%. And the VIX is falling -7.5% this morning below the 19 level as some of yesterday's fear comes out of the market.
Trading comment: A couple of different pictures for the SPX and Nasdaq in terms of their 50-day averages. The SPX broke through its 50-day support yesterday and today is trying to recapture that key support level (watch 1373). As for the COMP, it closed right at its 50-day support yesterday and today is bouncing higher from those levels (watch 2992). Looking at many of the other growth stocks that have been leading the market, most of them are still holding up. A handful have broken below their recent uptrend lines but are still trading above their 50-day averages. That said, yesterday was another distribution day (read: high volume selloff) in the market and adds to the number of distribution days we have seen in recent weeks. As such, traders should be in defensive mode and looking to protect profits and raise cash.
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