And the Q1 Earnings Season Begins
Stocks on Wall Street ended lightly off on Wednesday, the S&P 500 closing beneath the 50 period EMA for the first time since the elections. The pressure on stocks hasn’t subsided in light of geopolitical concerns and Trump’s comments on the U.S. dollar and interest rates.
Newly elected President Trump said in an interview to the Wall Street Journal that the dollar is too strong; he made that comment despite having said that he would be happy to see interest rates remain low. The U.S. dollar (UUP), which has risen significantly over the last few months in light of forecasts for higher interest rates, has hurt American companies with multinational operations.
Investors sought cover yesterday in defensive stocks and other havens like gold. Industrial stocks (XLI) and raw materials (XLB) recorded the market’s strongest losses, together with financial stocks (XLF), utility stocks (XLU) and media stocks having given the S&P 500 its strongest tailwind.
The financial sector (XLF) fell 0.9% in advance of the results of 3 large banks which will be released today, essentially kicking off American firms’ Q1 earnings season. Analysts expect American firm earnings to record quarterly growth of 10%.
A signal that we could see further weakness can be seen in the S&P 500 having closed beneath the 50 period EMA for the first time since November 8th. Some market strategists perceive a close beneath the 50 period EMA as a prospective signal of more weakness to come. Traders will focus on how the market moves in relation to this level. The VIX index, thought of as the best fear gauge the market has to offer, continued to rear its ugly head – after having closed 2 days ago above the 15 point level for the first time since the November elections. The VIX index has soared 25% on the week.
An escalation in the tensions between the U.S., Russia, North Korea and Syria – after a U.S. cruise missile strike on a Syrian airbase last week and the rerouting of a U.S. naval armada to North Korea, have left investors on pins and needles. Investors are concerned that these developments are likely to throw Trump off track in so far as pushing through his proposed business friendly initiatives go, with the prospect of tax reform, which had spurred the market to a series of new historic highs since the elections, possibly now playing second fiddle to more weighty global events.
In summary for the day, the S&P 500 shed 0.38%, the NASDAQ falling 0.52%.
Wells Fargo (WFC), Citigroup (C), and J.P. Morgan (JPM) are the 3 large banks expected to report today, the last trading day of the week. Tomorrow, there won’t be trading on Wall Street in commemoration of Good Friday.
On the S&P 500, 12 stocks rose to new 52-week highs, just one dipping to a new yearly low; on the NASDAQ, 51 stocks recorded new 52-week highs, 42 falling to new yearly lows.
About 6.2 billion shares changed hands on U.S. exchanges, compared to the 6.6 billion average over the last 20 trading days.
Thursday: On the last trading day of the week, traders will focus on a trove of economic figures at 8:30 N.Y. time, with the release of the Producer Price Index and initial unemployment claims. The University of Michigan Consumer Confidence Index will be released at 10:00.
Among the companies that will be reporting today before opening, be primed for the numbers of these banks and financial firms: JPM, C, WFC, and PNC. Other reporting companies include INFY, and TSM.
Thursday’s Hot Stocks: JPM, C, WFC, INFY, TSM, PNC, HBI, AERI
IPOs: CADE, TOCA, HCC
Have a great trading day!
|Tuesday||10:00||JOLTS – Job Openings||–||Medium|
|Wednesday||8:30||Export Prices ex-ag.||–||Medium|
|Wednesday||8:30||Import Prices ex-oil||–||Medium|
|Friday||–||Market Close – Good Friday|
|DAL||Delta Air Lines, Inc.||AM||Wednesday|
|JPM||JPMorgan Chase & Co.||AM||Thursday|
|WFC||Wells Fargo & Company||AM||Thursday|
|PNC||The PNC Financial Services Group, Inc.||AM||Thursday|
|TSM||Taiwan Semiconductor Manufacturing Company Limited||AM||Thursday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy”
|Sector||Healthcare | Biotechnology|
No.1 – NKTR
|Sector||Healthcare | Biotechnology|