2015 Recap Season

Equities start the day higher as I kick off this 2015 Recap season with a win. Wait, that was the Packers, on a ridiculous “no catch” call. Come on, in what world is that not considered a catch? Did Jerry Jones run out of “hey we need the right call here hint hint” passes from the league? Anyway, I was waiting for the first week of the year to go by before writing a recap so I could get clarity on the market. Don’t you just love that phrase in our industry? “Im not making a call without further clarity on the situation.” Just awesome, as if such a thing exists that would make hard situations easier to analyze. Speaking of hard situations, I might have to close my backyard oil exploration company because gas in my neighborhood is cheaper than a snickers bar. $1.95 to fill up my suburban grocery wagon? What year is it? Check out what the drop in oil is projected to do to the S&P500: "Profit is forecast to have grown 2 percent in the final three months of 2014 and increase 2.8 percent for the current quarter, down from analysts’ October estimates of 8.1 percent and 9.2 percent, respectively. Without energy companies, profit gains would have been 4.7 percent and 7.8 percent..." The market flat out doesn’t know what to do / think about falling oil prices. The only thing with more diametrically opposing views than Bryant’s catch is whether $40 oil is good or bad for stocks. Is it deflation? A precursor to slowing global growth? Yes. Is it amazing for consumers/global economies?  Yes. Should it worry you as a stock market investor? Yes. Should you rejoice in lower energy costs? Yes. Did Tony Romo look like a total wuss with that balaclava on?  Yes.

After the open stocks fell as Crude oil dropped 5%, or as most energy traders call it, Monday. I can’t even remember the last day Crude oil rose, feels like an eternity. Have you ever wondered what a chart of oil would look like if we invented a car that got 286 miles per gallon? I’m guessing this, yet that car doesn’t actually exist. Commodity forecasting….good luck!! No economic data today and nothing meaningful out of Europe so all we had to go on was more energy uncertainty. Two stock meltdowns today worth mentioning: SNDK and TIF. SNDK fell 13% because I can get an 85 TB hard drive for the price of a chicken mcnugget and TIF slumped 13% because two months’ salary? Come on…what ever happened to true love ? (they were both pre-announcements) Winners were BMY, CELG, FTR, WIN, and LULU which soared 8% after I bought two pair of $35 underwear there.  No joke, they sell $35 men’s underwear, I’m in the wrong business. By lunch we sat on 2,030 down 0.7%.

In the afternoon we watched US CENTCOM’s twitter account get hacked by some kind of cyber caliphate. ISIS has computer nerds too?  What good are F-22s gonna do against that? How the heck can US CENTCOM get their twitter account hacked? Do they use two factor authorization on that thing because my son does on his level 89 World of Warcraft wizard and he’s never been hacked. Sigh. I mean come on man, do I need to start a cyber-security business to go along with men’s underwear? Anyway, the market closed right where we were at lunch, 2,028, down 0.8%. Earnings kick off soon and I’m hopeful that some good old fashioned corporate data kicks the market from its endless fascination with a single commodity because it’s dire at this point. There are two things that can instantly lift this market: QE out of Europe and a whole slew of earnings beats. Let’s hope we get both soon. 

Final Score:  Dow -54bps, S&P500 -81bps, Nasdaq -103bps,  Rus2k -47bps.      

News highlights:

• Succinct Summation of the Day’s Events: Oil made the stock market selloff for the 18th time in the last 37 days.
• Today’s MUST READ is about the “biggest investment mistakes” people can make told by some of the industry’s best. Great article, trust me on this. Read it. This one was my favorite: “[The single biggest mistake is] reacting to noise in the market and becoming emotional. Markets are often highly irrational over short periods of time – investors need to have their own assessment of a given situation and not be slaves to the market. […]”
• Can the market handle falling earnings? Josh says “On the surface, the slowdown looks nasty, but according to Factset via WSJ, most of the weakness can be attributed to the energy sector, where earnings are expected to be down 19%. Ex-energy stocks, the S&P 500 should still show earnings growth of 3.5% according to current consensus. Not the end of the world”
• Dear readers…I ask you….did the Patriots play fair or foul with this?
• Bin Talal on oil and the markets: Q: Will prices continue to fall? A: If supply stays where it is, and demand remains weak, you better believe it is gonna go down more. But if some supply is taken off the market, and there's some growth in demand, prices may go up. But I'm sure we're never going to see $100 anymore. I said a year ago, the price of oil above $100 is artificial. It's not correct.
• I bet they sell a ton of these in Brooklyn
• I nominate this person for Parent of the Year.
• So you just had your first kid, you are a young couple hoping to be the best helicopter parents on the block. Technology is here for you!
• When you are facing a huge challenge in your life remember this picture. 

We’ll end tonight’s recap with a guy jumping thru windows.  And ladders.  And other tiny spaces.   Truly amazing stuff (the one at 2:28 is ridiculous). 

https://www.youtube.com/watch?v=0hR7RyDLCs8&a

Have a good night.