The market spent most of the day churning as we await the first significant earnings reports of the quarter. Intel is reporting now, and it looks very good, and JPM will be out in the morning.
The most significant thing about the action today was that the weak retail sales number had so little impact. It was similar to the response to the weak jobs numbers last Friday. The market just didn't care. The buyers kept buying, and the bears continue to be shut out.
The big question for the next two weeks is going to be whether or not fourth-quarter earnings reports change the character of this market. Expectations are high, and we have a lot of complacency, which make for some dangerous conditions if there are some disappointments. Even if there aren't any big disappointments, it is possible that we might see some selling if folks start to worry that all the good news is already priced in.
The INTC report appears to be quite strong, and the stock is up on the news and running higher so far. Last quarter, INTC did well also, but it hit its high at the open the next morning and traded down steadily form there. If the stock starts to trade down on such a good report, then we'll have to start thinking more defensively as other reports start to hit.
We have JPM in the morning, and that will set the tone for the financials....
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