Thursday, October 16, 2008
Oct 16 - Afternoon update
The market has settled some since dropping over 300 pts after the first hour of trading this morning, with the Dow currently trading down only .5%. Continental Airlines reported tremendous 3Q results, and is currently trading up 14%, carrying the rest of the Airline sector with it (trading on average up 13% as crude continues to drop). VIX has settled a bit, currently trading up 10%, down from its earlier gains of 18%. Sector stength currently showing in Energy, Pharma, and Tech. GOOG earnings will be highly anticpated after close today.
World Series bound
Apologies to any readers I have out there for my absence. My world series bound phillies took precedence over any reporting on the markets yesterday.
I will keep the morning report brief. Positive jobless report is outweighing the negative 3Q reports from Citigroup and Merrill at the moment, and the Dow is trading up about 50 points.
Crude is trading down another 2%, as recessionary pressures continue to weigh in. Despite this, energy and oil stocks are trading mostly higher in the first hour. Tech is also joining in on the early rally. I still see a 2% drop for the Dow at close today.
I will keep the morning report brief. Positive jobless report is outweighing the negative 3Q reports from Citigroup and Merrill at the moment, and the Dow is trading up about 50 points.
Crude is trading down another 2%, as recessionary pressures continue to weigh in. Despite this, energy and oil stocks are trading mostly higher in the first hour. Tech is also joining in on the early rally. I still see a 2% drop for the Dow at close today.
Wednesday, October 15, 2008
Oct 15 - Afternoon Update
Bernanke has just finished speaking, and the message was clearly not a good one. To sum it up in a few words, he's said that economic recovery cannot begin until the markets return to a normal state. It doesn't take a brilliant person to understand the high level of uncertainty and caution in this statement, and the markets are certainly proving that, as the Dow is now trading down over 5%. Whether Wall St. can digest this reality and move on will be the primary focus as we move towards the close. With the disappointing retail numbers still fresh in investors' minds and with the VIX trading up over 13% as of 2pm, it is unlikely we will see the Dow recover much, if any, of these losses today. The situation today is another clear reminder that we are still very much in a bear market, and that Monday was one of your typical large one-day rebounds that are often seen a bear market such as this.
Oct 15 - The First Hour
My fears from this morning have materialized, as the Dow is trading down over 3.5% at the moment. Coca Cola and Wells have remained strong after their positive 3Q numbers announced prior to the open, but aside from that, we are seeing red across all sectors today as Retail numbers are indeed dragging the markets down. Crude has continued its fall, down 5% now, and another unfortunate number to focus on is the 9.5% surge in VIX since the open. This is a clear sign that investors are coming back down to earth, and realizing that there is much work ahead for the next President to dig us out of this recession.
The only bright spot at the moment is the Airline sector, which is clearly benefitting from yet another recessionary drop in crude prices. United Airlines (UAUA) is leading the way in that sector with gains of 5.5%. Delta (DAL) announces 3Q numbers before the close today, so keep your ears open for their results as a further surge for the sector could come about if results are positive.
EBAY also announces 3Q results before close today, and as it stands now, investors are quite bullish on estimates, as call buyers are outnumbering put buyers 1.7 to 1 right now. If results are in fact positive, this could erase some of the fear from this morning's Retail numbers, and allow the Dow to erase some of its early losses in afternoon trading.
The only bright spot at the moment is the Airline sector, which is clearly benefitting from yet another recessionary drop in crude prices. United Airlines (UAUA) is leading the way in that sector with gains of 5.5%. Delta (DAL) announces 3Q numbers before the close today, so keep your ears open for their results as a further surge for the sector could come about if results are positive.
EBAY also announces 3Q results before close today, and as it stands now, investors are quite bullish on estimates, as call buyers are outnumbering put buyers 1.7 to 1 right now. If results are in fact positive, this could erase some of the fear from this morning's Retail numbers, and allow the Dow to erase some of its early losses in afternoon trading.
Oct 15 - Pre-Market
Well I was incorrect on a couple of fronts from yesterday's "Closing Report." It's been announced this morning that both Wells and Coca Cola have beaten estimates with their 3Q reports. However, only Coca Cola is trading up this morning, at 5% over yesterday's close. Wells on the other hand is trading slightly down in pre trading. JP Morgan announced negative 3Q results, and is trading down almost 3% in pre.
US Equity market futures are also down, with S&P futures trading down 2.75% and Nasdaq futures trading down 1.75%. Global markets are negative as well up to this point, the Nikkei losing almost 3% after its rally to start the week. Crude futures are trading down 3.5% as global recession fears continue to stay in focus.
As I stated in yesterday's "Closing Report", I expected today's Retail numbers to bring investors back to the reality that is this current bear market, and spin the Dow down a couple percentage points, but it appears that investors are already bracing themselves for disappointment, as futures continue to trend down this morning. Along with this, I also think investors are beginning to realize that the government purchase of bank stocks is a great step in the right direction, but that we are only in the infancy of repairing this mess. Felix Salmon from SeekingAlpha raises an interesting point in this article (http://seekingalpha.com/article/99909-will-the-banks-lend) that banks may still be very fearful to lend despite the capital injection from the Treasury.
We'll see if the bulls can step in to some pre trading and make for a positive open, but I have my doubts, and I'm beginning to fear that Retail numbers and investors' move back to the reality of the mess may drag the Dow down more then the 2.5% I called for yesterday.
On a brighter note, the Phils can clinch tonight!
US Equity market futures are also down, with S&P futures trading down 2.75% and Nasdaq futures trading down 1.75%. Global markets are negative as well up to this point, the Nikkei losing almost 3% after its rally to start the week. Crude futures are trading down 3.5% as global recession fears continue to stay in focus.
As I stated in yesterday's "Closing Report", I expected today's Retail numbers to bring investors back to the reality that is this current bear market, and spin the Dow down a couple percentage points, but it appears that investors are already bracing themselves for disappointment, as futures continue to trend down this morning. Along with this, I also think investors are beginning to realize that the government purchase of bank stocks is a great step in the right direction, but that we are only in the infancy of repairing this mess. Felix Salmon from SeekingAlpha raises an interesting point in this article (http://seekingalpha.com/article/99909-will-the-banks-lend) that banks may still be very fearful to lend despite the capital injection from the Treasury.
We'll see if the bulls can step in to some pre trading and make for a positive open, but I have my doubts, and I'm beginning to fear that Retail numbers and investors' move back to the reality of the mess may drag the Dow down more then the 2.5% I called for yesterday.
On a brighter note, the Phils can clinch tonight!
Tuesday, October 14, 2008
Oct 14 - Closing report
I was beginning to doubt my pre-market expectations when the Dow had dropped 260 points at 2:45pm. But the strong gains from many of the financials kept me confident, and proved to keep Wall Street confident, as the Dow finished the day off less then 1%.
Despite a lowsy day for tech, INTC beat earnings estimates after market, and is trading up 6% in after hours trading. Genentech (ticker DNA) also reported better then expected 3Q results, and is trading up 4.1% after hours.
Big earnings announcements from JP Morgan, Wells Fargo, and Coca Cola tomorrow before the open. Obviously results from JP and Wells will be negative, but will they beat estimates, and how will Wall Street react to their negative 3Q? I think the reaction will be a positive one for a couple of reasons: 1) Wells recent acquisition of Wachovia was a huge positive not only for the sector, but for the credit markets as a whole, 2) JP has been one of the most fundamentally sound financial institutions since the credit crisis began, and I don't expect this fact to change with Jamie Dimon at the helm. As for Coca Cola, they have traded down every day this month, but a scan of the October option contract volume doesn't favor either side, so they're a tougher call to make, but I see no reason why they would beat estimates, and since I don't like to go against a trend, I'm betting they will drop again tomorrow.
As for Wednesday's market prediction, I think a strong performance from financials today mixed with strong 3Q numbers from INTC (tech) and DNA (pharma) will lead to a positive open. However, I expect weak results from the 10am annoucement of Retail Sales and Empire Manufacturing numbers, and I expect this to drag the market down for the remainder of the day, finishing down 2.5%.
Despite a lowsy day for tech, INTC beat earnings estimates after market, and is trading up 6% in after hours trading. Genentech (ticker DNA) also reported better then expected 3Q results, and is trading up 4.1% after hours.
Big earnings announcements from JP Morgan, Wells Fargo, and Coca Cola tomorrow before the open. Obviously results from JP and Wells will be negative, but will they beat estimates, and how will Wall Street react to their negative 3Q? I think the reaction will be a positive one for a couple of reasons: 1) Wells recent acquisition of Wachovia was a huge positive not only for the sector, but for the credit markets as a whole, 2) JP has been one of the most fundamentally sound financial institutions since the credit crisis began, and I don't expect this fact to change with Jamie Dimon at the helm. As for Coca Cola, they have traded down every day this month, but a scan of the October option contract volume doesn't favor either side, so they're a tougher call to make, but I see no reason why they would beat estimates, and since I don't like to go against a trend, I'm betting they will drop again tomorrow.
As for Wednesday's market prediction, I think a strong performance from financials today mixed with strong 3Q numbers from INTC (tech) and DNA (pharma) will lead to a positive open. However, I expect weak results from the 10am annoucement of Retail Sales and Empire Manufacturing numbers, and I expect this to drag the market down for the remainder of the day, finishing down 2.5%.
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