Stocks Go All St. Elmo's Fire On Us

Equities start the day higher as stocks go all St Elmo’s Fire on us. My main man Doug Hafemann, top shelf Industrial trader, dropped some hot 80s beats on me this morning and I knew the recap had its theme. St Elmo’s Fire is one of those 80s songs you run across while driving to the supermarket and you sit there until it’s complete. The video is absolutely epic and the movie was filled with 80s icons. Who didn’t love those “coming of age” sagas where we root for the burnout to become something greater? Anyway…what does this have to do with stocks? The line goes “Soldier of…only you can do what must be done” (you sang it in your head didn’t you). How good is that!!  LET’S GO! These companies are the only ones who know what must be done: they have to report strong earnings, raise guidance and say “the economy is strong, we have a big tailwind from tax reform and we plan on spending some of this money to grow”. If they do that then all of us will be singing “I can hear the music playin’ I can see the banners fly” because we’ll finally have a real reason to rally. I mean check the facts jack: 51 companies in the S&P have reported so far and we’re currently rocking a 30% bottom line growth rate. 30%! If you’re looking for broad sweeping conclusions based on very little data you’ve come to the right place!! Oh and guess what, we haven’t even seen a single Energy company report and Crude just touched $68!! What if those guys start pumping out positive forward guidance because oil stopped being a train wreck? “I can see a new horizon…underneath the blazing sky” (love that part).

After the open we saw a big test of bullish sentiment as the market got whacked almost instantly. Two or three weeks ago that early drubbing would’ve been the start of a 1.5% decline but not on April 18th my friends, no no no, we saw dip buying show up and the market raced higher. #thingswewanttosee. Let’s put aside market commentary though and talk stocks and jocks. IBM reported last night, opened up another downside gap on their chart, and went on to be the worst performer on the day. Maybe these guys should just change their ticker symbol to UGH (h/t lindzon). Thing has more gaps on its chart than a 2yr olds mouth. AMZN announced they are going to sell a FIRE TV thru BBY and both of the stocks rallied.  How is AAPL gonna sit by and let AMZN take the smart TV space from them after they took the home speaker crown? AMZN is gonna lock in every millennial cord cutter into its TV app ecosystem for life. Feels like AAPL is missing out on a couple things that seem like no brainers (55mm cord cutters) and if you feel the same way hit up my boy @Colin_Sebastian on TWTR to complain like I do. A whole slew of transports did well today (UAL, CSX, AAL, R) and if you’re looking for things to root for this sector should be tops on your list. Losers other than IBM included LRCX, MO, AMAT, GPS, JNPR, and this guy who was naked punching cars in a Publix parking lot. I swear if I saw that headline and I didn’t know Publix was in Florida I still woulda said Florida. By lunch we sat on 2,714 up 0.30%.     

The rest of the day saw a small selloff and a close at 2,708 +0.08%. Now I’m on record saying the economy is late stage, probably like 7th or 8th inning, but I’m not a stock market bear. There’s runway left and if you ran for the hills today it would probably be a mistake. @andrewthrasher points out that Advance/Decline lines are making new highs and that’s just not the kind of thing you see in a downtrend so let’s stay constructive here, watch earnings come in, watch the yield curve and other macro indicators, and be satisfied with the notion that no one will ever call the top. I won’t, you won’t, no one on Twitter will, no equity strategist will, Trump won’t, but my Dad might because he’s the best fade of all time.  

News Highlights:

I have two end links for you tonight so pick your poison!

The first one will make you ooo and ahhh

The second one will make you angry at adults.

Have a good night