One-man-team: Apple Steals the Show!
Without Apple (AAPL), indexes could have only dreamed of ending in the green. The S&P 500 succeeded in eking out gains yesterday and cutting its 4-day losing streak as the Fed left interest rates unchanged. Traders expect the Fed to hike rates for the first time in June, giving a March hike slim chances of just 20%.
The tech-leaning NASDAQ was propped up by a 6.13% surge in the price of Apple (AAPL), after the company trounced analysts forecasts, announcing that iPhone sales had beaten out expectations. Without the spike in Apple, all of the indexes would have ended in the red. Apple is such an important component part in the major indexes that hedge fund managers have no choice but to chase the stock when it shows its prowess. There’s simply no other way to keep pace with the major indexes other than increasing exposure to AAPL. Seeing that the focus in investment management is performance relative to indexes as opposed to absolute performance, the risk of chasing a stock like Apple, likely to appear stretched tight in its own right, is not so big. In the event the stock corrects, so will the indexes to which it belongs, meaning an investment fund’s holdings will move in tandem with index performance.
In the Fed’s first meeting since Donald Trump was elected president, the central bank noted that the state of the job market remains positive, encouraging inflation, thus transmitting the message that the economy is in good shape.
Figures released earlier in the day showed factory activity accelerating to a level not seen in over two-and-a-half years during the month of January – and that private sector employers had picked up the pace of new hires. With that said, indexes had a hard time building up momentum, the S&P 500 just barely escaping its fifth consecutive day of losses.
In summary for the day, the S&P 500 tacked on 0.03%, the NASDAQ rising 0.5%.
One of the stocks standing out in yesterday’s trading was J.C. Controls (JCI) which fell 3.4% to the $42.50 level after its last quarter sales fell short of analyst expectations.
Intel’s competitor, computer processor maker, AMD, soared 16.3% to the $12.03 level in intraday volumes 4-times average after releasing its earnings numbers.
After Closing: Facebook (FB) soared 2% in late trading in the initial response to its strong earnings report that had outstripped analysts’ projection. At the same time, at the end of late trading, the gains had mostly dissipated, FB closing the late session up just 0.13%. Earlier in regular trading, FB had traded up as much as 2.23%.
On the S&P 500, 30 stocks rose to new 52-week highs, 2 dipping to new yearly lows; on the NASDAQ, 135 stocks recorded new 52-week highs, 27 falling to new yearly lows.
About 7.59 billion shares changed hands on U.S. exchanges, above the 6.8 billion average over the last 20 trading days.
Thursday: The market is preparing itself for the U.S. Department of Labor’s official employment report tomorrow, though in the meantime, traders will be carefully eyeing the earnings season which seems to get more and more fascinating, Amazon (AMZN) releasing its last quarter numbers after closing.
Until now, the earnings season numbers have been very good. American firms are making money and the numbers being released do justice for current market valuations. That’s not to say that stock prices are cheap, though by the same token, they’re not super-expensive. Of the S&P 500 companies reporting to date, 66% succeeded in beating out earnings forecasts, while 48% succeeded in beating out top line revenue forecasts. Firm earnings are expected to record sharp year-over-year quarterly growth of 7.5%.
Traders are expecting a solid January employment report tomorrow, after the ADP survey, which tabulates the number of new private sector hires, recorded an outstanding reading of 246 thousand for January. Economists now expect to see a reading of 175 thousand new jobs in the governmental employment report, though, in our view, the projection come Friday is likely to rise.
Today’s economic figures include weekly unemployment claims at 8:30 N.Y. time, unit labor costs and worker productivity figures to be released at the same hour.
The earnings reports expected for today include DLPH, MRK, DB, EL, BSX, COP, CME, and RL before opening. After closing, be primed of course for the primetime report of AMZN, along with V, AMGN, CMG, GPRO, and FEYE.
Thursday’s Hot Stocks: FB, DLPH, MRK, EL, CME, RL, QRVO, CAVM, MJN
Have a great trading day!
|Monday||10:00||Pending Home Sales||1.3%||Medium|
|Tuesday||9:00||S&P Case Shiller Home Price Index||5.0%||Medium|
|Wednesday||8:15||ADP Employment Change||165K||High|
|Wednesday||14:00||FOMC Rate Decision||0.625%||High|
|Thursday||8:30||Unit Labor Costs||1.9%||Medium|
|ZBH||Zimmer Biomet Holdings, Inc.||AM||Tuesday|
|VLO||Valero Energy Corporation||AM||Tuesday|
|TMO||Thermo Fisher Scientific Inc.||AM||Tuesday|
|LLY||Eli Lilly and Company||AM||Tuesday|
|UPS||United Parcel Service, Inc.||AM||Tuesday|
|XOM||Exxon Mobil Corporation||AM||Tuesday|
|APC||Anadarko Petroleum Corporation||PM||Tuesday|
|CHRW||C.H. Robinson Worldwide, Inc.||PM||Tuesday|
|OKS||ONEOK Partners, L.P.||PM||Tuesday|
|EA||Electronic Arts Inc.||PM||Tuesday|
|BAX||Baxter International Inc.||AM||Wednesday|
|MPC||Marathon Petroleum Corporation||AM||Wednesday|
|JCI||Johnson Controls International plc||AM||Wednesday|
|ADP||Automatic Data Processing, Inc.||AM||Wednesday|
|MO||Altria Group, Inc.||AM||Wednesday|
|LNC||Lincoln National Corporation||PM||Wednesday|
|ALL||The Allstate Corporation||PM||Wednesday|
|NXPI||NXP Semiconductors N.V.||PM||Wednesday|
|EW||Edwards Lifesciences Corporation||PM||Wednesday|
|IP||International Paper Company||AM||Thursday|
|BSX||Boston Scientific Corporation||AM||Thursday|
|EL||The Estee Lauder Companies Inc.||AM||Thursday|
|CME||CME Group Inc.||AM||Thursday|
|PM||Philip Morris International Inc.||AM||Thursday|
|MRK||Merck & Co., Inc.||AM||Thursday|
|MSI||Motorola Solutions, Inc.||PM||Thursday|
|HSY||The Hershey Company||AM||Friday|
|LYB||LyondellBasell Industries N.V.||AM||Friday|
|CLX||The Clorox Company||AM||Friday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy
No.1 – FAST
|Company Name||Fastenal Company|
|Sector||Services | Industrial Equipment Wholesale|
No.2 – DATA
|Company Name||Tableau Software|
|Sector||Technology | Application Software|