The Scourge Of Standard Time Descends Upon Us

Equities start the day lower as the scourge of Standard Time descends upon us. I don’t know what WW 1 nutjob invented this spring forward / fall back thing but I’d be happier if I was going home in daylight rather than pitch black. Hey, what’s been going on in this market thing lately? Are we still worried about Ebola and falling crude and a new “bear market”. What….what’s that you say? We are sitting at all-time highs just 13 sessions after a 10% correction? (I’m calling it 10%, I don’t care.  It was 9.8% intraday high to low…that’s 10). You just can’t keep a good market down can you? Why though? Why did it put that awesome V shape on the chart. Anyone ever heard of this thing called earnings? Companies put out these numbers saying how good / bad they are doing and stock market participants are supposed to factor those into the value of equities. I know, it’s not as flash as diseases and geopolitical turmoil but I guess they do matter.  Factset, one of my favorite entities, say they are doing pretty good! “In the aggregate, companies are reporting earnings that are 4.7% better than the Street. This is up from 3.8% last week and better than the 3.6% four-quarter average.” Everyone involved in the stock market should go read this link right now because there’s lots of juicy information to ponder. So as you sit there and ask yourself “why did the market bounce so fast” the answer might just be as simple as “these here earnings things, that are fairly important to stock prices, are actually alright”. Don’t you hate it when there’s an easy answer? Anyway, it looks like midnight outside right now so before I get Hulkbusting angry I’m going to move on to the day’s events.

After the open, we swung around on a combination of earnings and one random headline about the ECB. Reuters reported that there are grumblings about Draghi and that was enough to knock about 1% off the S&P. It’s amazing how contentious the situation is becoming over there, there must be some serious hallway intrigue going on.  Will the ECB do massive QE? Won’t they? That’s the multi trillion dollar question right now. And no joke, if the ECB announced anything like the US or Japan has done the market would go absolutely vertical. But it might not happen, so there’s that too.   We bounced after Europe closed and by lunch SPX was only slightly lower. Winners ADM, EXPD, DAL, IP, and ODP. Losers PCLN, HLF, KORS, X, REGN, and LYB. Crude oil continued to act horribly spending most of the day down a couple bucks. Where can crude oil go here? $60? $50? If so, is that good or bad for us? I honestly don’t know, I would think its net positive in the long run but it’s gonna crush a huge sector of the S&P. If I had told you GDP was 3-4% and Crude oil was $70 a barrel, wouldn’t you take that?

The back half of the day saw a small rally but not enough for green numbers. We closed at 2,011, down 29 bps, on a relatively uneventful day. Which is good, I’m serious. We need to digest the 8% gain we just had so if we get about 10 days in a row of sideways, boring price action, I’d be quite content. Thanks for reading and go enjoy your 15 hours of night. 

Final Score:  Dow +10bps, S&P500 -29bps, Nasdaq -31pbs, Rus2k -41bps. 

News Highlights:

Anytime someone sends me a link that says “watch people try and cut down a tree” I’m pretty much auto including it in the recap.   So many fails…

Have a good night.