David Moenning Daily State of the Markets: 1/24
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Modest, Minor, Muted, etc.
Good morning. After Friday�s thrashing, which many felt was exacerbated by options expiration, it wasn�t surprising to see some buying enter the market yesterday. The S&P and NASDAQ were sitting right on important support, the market had quickly become oversold on a short-term basis, and the feeling was that the dive had been overdone. However, considering the intensity of Friday�s drop, Monday�s advance of just 21 points has to be considered rather modest, or minor, or muted, or, feel free to insert your favorite adjective for �lackluster� here.
Stocks got a boost from Ford�s earnings, which were surprisingly better than expected, and their aggressive restructuring plan (Wall Street just loves to hear a company announce they are going to cut tens of thousands of jobs). Modestly lower oil prices, another drop in natural gas, and an upbeat report from business economists helped get the market started off on the right foot. However, another disappointing report from the banking sector kept the enthusiasm in check.
While stocks did rebound in the early going, traders were wary of the �sell the rallies� mentality that had prevailed near the end of the year. And true to form, some selling did attempt to come in a couple of different times during the session. But reassuring comments from St. Louis Fed President William Poole helped the bulls put up a plus sign on the day.
Mr. Poole noted the market�s view that the Fed will pause after rate increase in January and March was a �reasonable assumption.� Coupled with other recent comments from FOMC members, notably Susan Bies statement that the Fed is �near its end point,� this is a fairly clear announcement that the Fed is looking to quit soon.
Turning to this morning, there isn�t any economic news before the bell again today, but we will get the Richmond Fed Index at 10:00 eastern. In terms of today�s stock market, so far at least, stocks have a fairly, well, how should we say it, muted feel to them.
Running through the pre-game numbers, Gold is currently trading down $3.50 to $555.10, Oil is pulling back again and is down -$0.70 to $67.40, Natural Gas continues to trade lower at $8.48, the yield curve is just barely positive with the 2-yr at 4.37% while the 10-yr is at 4.38%, and stock futures are up modestly (Dow +11, S&P +2.00, NASDAQ +4.0).
So after an rebound that can be described as modest at best, the question of the day is if the Bears will be looking to continue their run today.
Stocks "In Play" This Morning:
CSX � Reports $1.03 vs. $0.90. Revenue $2.2B vs. $2.34B
TXN - Reports $0.43 vs. $0.42. Revenue $3.59B vs. $3.63B. Reiterated Buy at B of A, Peer Perform at Bear Stearns
TGT � Raises low end of sales guidance to 4.5% to 5% from 3.0% to 5.0%
DD � Reports $0.13 vs. $0.10. Revenue $5.8B vs. $5.84B. Guides full $2.60 vs. $2.82 and Q1 $0.70 vs. $1.00
AMAT � Jeffries downgrades semi-cap equipment sector including AMAT
JNJ � Reports $0.73 vs. $0.73. Revenue $12.6 vs. $13.2. Sales of pharmaceuticals light
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: CSX, AMAT, JNJ
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
Good morning. After Friday�s thrashing, which many felt was exacerbated by options expiration, it wasn�t surprising to see some buying enter the market yesterday. The S&P and NASDAQ were sitting right on important support, the market had quickly become oversold on a short-term basis, and the feeling was that the dive had been overdone. However, considering the intensity of Friday�s drop, Monday�s advance of just 21 points has to be considered rather modest, or minor, or muted, or, feel free to insert your favorite adjective for �lackluster� here.
Stocks got a boost from Ford�s earnings, which were surprisingly better than expected, and their aggressive restructuring plan (Wall Street just loves to hear a company announce they are going to cut tens of thousands of jobs). Modestly lower oil prices, another drop in natural gas, and an upbeat report from business economists helped get the market started off on the right foot. However, another disappointing report from the banking sector kept the enthusiasm in check.
While stocks did rebound in the early going, traders were wary of the �sell the rallies� mentality that had prevailed near the end of the year. And true to form, some selling did attempt to come in a couple of different times during the session. But reassuring comments from St. Louis Fed President William Poole helped the bulls put up a plus sign on the day.
Mr. Poole noted the market�s view that the Fed will pause after rate increase in January and March was a �reasonable assumption.� Coupled with other recent comments from FOMC members, notably Susan Bies statement that the Fed is �near its end point,� this is a fairly clear announcement that the Fed is looking to quit soon.
Turning to this morning, there isn�t any economic news before the bell again today, but we will get the Richmond Fed Index at 10:00 eastern. In terms of today�s stock market, so far at least, stocks have a fairly, well, how should we say it, muted feel to them.
Running through the pre-game numbers, Gold is currently trading down $3.50 to $555.10, Oil is pulling back again and is down -$0.70 to $67.40, Natural Gas continues to trade lower at $8.48, the yield curve is just barely positive with the 2-yr at 4.37% while the 10-yr is at 4.38%, and stock futures are up modestly (Dow +11, S&P +2.00, NASDAQ +4.0).
So after an rebound that can be described as modest at best, the question of the day is if the Bears will be looking to continue their run today.
Stocks "In Play" This Morning:
CSX � Reports $1.03 vs. $0.90. Revenue $2.2B vs. $2.34B
TXN - Reports $0.43 vs. $0.42. Revenue $3.59B vs. $3.63B. Reiterated Buy at B of A, Peer Perform at Bear Stearns
TGT � Raises low end of sales guidance to 4.5% to 5% from 3.0% to 5.0%
DD � Reports $0.13 vs. $0.10. Revenue $5.8B vs. $5.84B. Guides full $2.60 vs. $2.82 and Q1 $0.70 vs. $1.00
AMAT � Jeffries downgrades semi-cap equipment sector including AMAT
JNJ � Reports $0.73 vs. $0.73. Revenue $12.6 vs. $13.2. Sales of pharmaceuticals light
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: CSX, AMAT, JNJ
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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