STTG Market Recap Apr 29, 2015 – Stock Trading To Go
U.S. indexes were in the red all day today as some quite miserable economic data didn’t do the normal trick of making everyone happy because it means the Federal Reserve will never raise rates in our lives. The S&P 500 fell 0.37% and the NASDAQ 0.63%. The Federal Reserve Open Market Committee released its meeting statement on Wednesday afternoon that removed all calendar references and showed no new guidance on the timing of the rate hike. So what was once seen as a rate hike in June, was pushed to September, and now sounds like it is being pushed to December. By the time they ever get around to actually raising rates the U.S. economy will probably be ready for a cyclical recession and it will be time to do QE!
“I don’t think anything has changed,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “There’s a clear indication the economy has slowed. The Fed is probably not going to hike rates until September. … The odds are increasing now for December.”
As for that bad economic report, the advance estimate of first quarter GDP showed an increase of 0.2 percent, a sharp slowdown from the fourth quarter’s 2.2 percent pace and below expectations of 1 percent growth. The government cited the strong dollar and the West Coast port strikes as negative factors.
Indexes are at an interesting spot. The NASDAQ still looks fine overall and is not even back down to its 20 day moving average as it was quite overextended a few days ago – and then put in a bearish outside reversal day. The S&P 500 however never rallied over our upper trendline and we are starting to see some deterioration in secondary indicators such as breadth. So some caution may be in order. Here are the longer term index charts:
The NYSE McClellan Oscillator seems to have lost its mojo in the past week:
We’ve been focused on company specific charts with the avalanche of earning announcement but a lot of interesting things have been happening in the meantime in broader areas so worth taking a break to look at those.
It was interesting to see bond yields rise on the Fed announcement – this is the 10 year and it is back over 2.0%.
The dollar has quietly been correcting after its parabolic move up.
Oil is starting to act quite a bit better lately – it has quietly built a bull flag of sorts which today it began attempting to push out of.
Overseas the German market also was hit very hard today – as one of the top two markets in Europe that is interesting to note. The German market had a parabolic move as well from January to March.
Also interesting, the transports never took part in this rally.
Twitter (TWTR) suffered a second nasty day in a row – seems like quite an overreaction to some reduction in guidance. There should be a lot of support in the mid $30s if it gets there.
Salesforce.com (CRM) rallied to a new all-time high amid reports that it hired bankers on takeover offers.
U.S. Steel (X) closed down sharply after posting an adjusted quarterly loss of 7 cents per share, surprising Street analysts who had expected a 12 cent per share profit. Revenue also missed estimates, as U.S. Steel said it has been hurt by significant steel imports. The company also lowered its earnings outlook for the full year.
Reports say Alibaba (BABA), the China-based online retail giant, has imposed a hiring freeze, in an effort to make the company more efficient. The stock has been dead money for a few months as it came public at an immense valuation.
Key earnings Thursday include ExxonMobil, ConocoPhllips, Royal Dutch Shell, Visa, AIG, LinkedIn, Celgene, Time Warner Cable, Teva Pharma, and First Solar.
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STTG Market Recap Apr 29, 2015 – Stock Trading To Go
