Earnings of Top Firms Gasp!
Yesterday, the S&P 500 recorded losses for the fourth time in five trading days on the background of a decline in the stocks of Goldman Sachs (GS) and Johnson & Johnson (JNJ) in light of their financial results, alongside geopolitical tension which added to investors’ tension levels.
Goldman Sachs (GS) fell 4.7% to the $215.59 level, after having traded at its lowest level since November 29th. The bank released numbers that missed analysts forecasts, trading revenues taking a turn for the worse. It was the sharpest day of losses for the stock since June 24th, a day after Britain voted to leave the Euro bloc.
Johnson & Johnson (JNJ) tumbled 3.1%, recording its worst trading day in the last 14 months after Q1 revenues didn’t come out in line with analyst forecasts.
The health sector (XLV) fell 1% on the day and the financial sector (XLF) slipped 0.8%, making them the 2 worst performing sectors of the 11 sectors on the S&P 500.
A rough start to the earnings season is likely to add to investors’ concerns about market valuations on the heels of a strong election-fueled rally in which hopes had been pinned on an aggressive growth-oriented posture from the Trump administration, something that had pushed indexes to a series of new historic highs.
In Summary for the Day: The Dow Jones fell 0.55%, the S&P 500 slipping 0.29% and the NASDAQ shedding 0.12%.
Safe haven assets have seen a lot of fanfare of late on the part of investors, gold and treasuries climbing in advance of imminent French elections, tensions flaring between North Korea and the U.S., along with May’s calls for early elections in Britain.
Despite the earnings misses on the part of a number of high profile companies, Q1 results seem altogether promising. Out of the 45 S&P 500 companies which have already reported, 76% trounced expectations.
On the S&P 500, 17 stocks rose to new 52-week highs, 2 dipping to new yearly lows; on the NASDAQ, 40 stocks recorded new 52-week highs, 59 falling to new yearly lows.
About 6.07 billion shares changed hands on U.S. exchanges, compared to the 6.41 billion average over the last 20 trading days.
Wednesday: A fall in governmental bond yields are like a litmus test for market pessimism – and that’s something there’s been a lot of lately! Bond yields move inversely from bond prices. That being the case, bond market purchasing has sent interest rates to levels not even entertained by many experts. However, with the potential at play for more bad news, in the event there’s another development that casts a pallor over the market and that catches players off guard, projections have 10-year T-bond yields falling to 2% or even 1.87%, the levels at which they had traded prior to the elections. On Tuesday, the 10-year T-bond yield fell to 2.165%, its lowest level since November 10th. On March 24th, yields had stood at 2.4%; that was the day on which Congress failed to pass Trump’s bill to replace Obamacare.
The 10-year T-bond yield is important seeing that it’s a general barometer for investor confidence. Likewise, it’s the financial instrument that determines mortgage rates, along with interest rates for other types of loans.
The market, on Wednesday, will glance at the Fed Beige Book on the economy which will be released at 14:00 N.Y. time. In weekly fashion, at 10:30, last week’s petroleum and petroleum product inventories will be released.
Today’s earnings reports will include ABT, MS, and TXT before opening. After closing, be primed for the numbers of EBAY, AXP, QCOM and CSX.
Wednesday’s Hot Stocks: ABT, TXT, IBM, LRCX, RARE
Have a great trading day!
|Monday||10:00||NAHB Housing Market Index||70||Medium|
|Wednesday||14:00||Fed’s Beige Book||–||High|
|Friday||10:00||Existing Home Sales||5.55M||Medium|
|UAL||United Continental Holdings, Inc.||PM||Monday|
|GS||The Goldman Sachs Group, Inc.||AM||Tuesday|
|UNH||UnitedHealth Group Incorporated||AM||Tuesday|
|BAC||Bank of America Corporation||AM||Tuesday|
|JNJ||Johnson & Johnson||AM||Tuesday|
|OMC||Omnicom Group Inc.||AM||Tuesday|
|IBM||International Business Machines Corporation||PM||Tuesday|
|LRCX||Lam Research Corporation||PM||Tuesday|
|URI||United Rentals, Inc.||PM||Wednesday|
|AXP||American Express Company||PM||Wednesday|
|PM||Philip Morris International Inc.||AM||Thursday|
|TRV||The Travelers Companies, Inc.||AM||Thursday|
|DHI||D.R. Horton, Inc.||AM||Thursday|
|GE||General Electric Company||AM||Friday|
|NEE||NextEra Energy, Inc.||AM||Friday|
|HON||Honeywell International Inc.||AM||Friday|
|STI||SunTrust Banks, Inc.||AM||Friday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy”
|Sector||Services | Department Stores|
No.1 – SHLD
|Sector||Services | Department Stores|