A Truckload Of Earnings

Equities start the day lower as a truckload of earnings gets dumped in our laps. All kinds of reports last night and this morning got people buzzing about the market! Companies like FB, QCOM, TXN, DNKN, EBAY, T….I mean I could go on and on but you’d delete this email so fast it would make my head spin. We can get to the nitty gritty of winners and losers later but let’s chat really briefly about internals! How exciting, when you opened this I bet you were saying “if he doesn’t talk about market internals I’m going back to the Treasury recap where they were talking about historical yield curves.” Since we are sitting on the highs I wondered whether market breadth was where we needed it to be.., or is there a worry to be had. Bespoke had a great link last night looking at this topic and here was their conclusion: “breadth has been hanging right in there with price. This implies that there are no negative divergences underneath the surface making the market vulnerable to a bigger decline. That doesn’t mean that the market can’t fall from here, but instead that the internals aren’t suggesting any weakness.” That sounds pretty good right? I mean it’s not a screaming buy signal but it helps to hear that the machinery below ground isn’t creaking. We’ve also seen ultra broad indices like the Wilshire 5000 and NYSE Composite threatening their own breakouts so we just need it to happen! I mean doesn’t it feel like if we got one or two days of fresh highs that a giant capitulation would occur? All that patience would finally end? It does to me, which is why this entire process has been so frustrating. Ok, let’s see what Thursday brought.

After the open, we spent a little time underwater but you know what? The sun beckoned, and we swam towards the surface. Right before lunch we broke above the waves like we had just shot out of Monstro. Higher…a bit higher…then as I digested some really bad leftovers the S&P touched 2,118, JUST shy of the intraday high on Feb 25. Tons of earnings today but you know what sector had the most eye opening move? That’s right…energy. We’ve spoken about this a lot recently but wow…I mean is the bottom in here? Oil seems to have found its 2nd wind from the low 40s and today nearly touched $60. All sorts of “hey, remember me?” type moves from names like HAL, CAM, NOV, and HP. Tech and media also looked good with winners like CVC, T, DTV, EBAY, JCI, and IBM. IBM and Crude…glad they made the same recap. Both things were just hated…hated….sentiment was godawful.  Now they creep ever so higher because that hatred is fading into the rear view mirror.   Fun to watch. Losers were PHM/LEN (new home sales not so hot), TXN (earnings), and GM (earnings). By lunch it felt like we were finally going to put this sideways misery behind us!

Which we did…kinda.  The S&P touched 2120, which is a new all time “intra-day” high, but slid near the end to close at 2,113. Which is, as you know, is not a new all-time closing high. The Nasdaq composite DID put in a new all time high, so, you know, if you bought in March 2000 congrats! You are back to even! What do we need now? Follow thru, plain and simple. Friday flat out HAS to be an up day or this might all be in vain. Friday is huge…HUGE. You gotta tune in tomorrow because it’s gonna be bigger than the Superbowl….of random Fridays….in US markets….in April….of this year….

Final Score:  Dow +11bps, S&P500 +24bps, Nasdaq +41bps, Rus2k +48bps.

News Highlights: 

We’ll end tonight with something I can’t say I’ve ever seen before.   A snowmobile base jump.   You’d think they use a more beat up snowmobile given the result…


Have a good night.