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Daily Market Update – April 29, 2015 (Close)
I didn’t know what the outcome of the GDP Report and the FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while. Like most news, though, even the most highly significant economic news, it will be forgotten as soon as the next bit of news comes forward. But its CEO did nothing to instill confidence today, as the shares tumbled even further after his appearance on TV, despite having tried to claw back some of this morning’s additional losses prior to his appearance. Twitter aside, there were two potentially very significant events and still more earnings to come today. Those earnings reports will be slowing down significantly once this week is over. At that point every one will try to interpret what the meaning of the past earnings season had been and what the prospects are for the coming quarter. For now, the theme appears to not be ready to change any time soon. The dollar is strong and oil prices, despite rallying higher, are still low. While this quarter was characterized by higher EPS data, but on lower top line revenue, as long as corporate buy backs continue into the next quarter, there may be some offset for the adverse impact of a strong dollar. What may be different the next quarter is that if low energy prices do continue we may see the kind of consumer led expansion of the GDP that we’ve been waiting for since the beginning of 2015. This morning the expectation was for another set of disappointing GDP statistics, so it was just a question of seeing whether those expectations were met and whether they were already baked into markets. we’ll see where that leads if materialized or where a surprise may lead if expansion is finally noted.The answers are, “yes, they were materialized, but no, they weren’t fully baked into markets.” While never looking very strong, even in the pre-open futures, once the GDP data was released and really was disappointing, there never was much of a reason to go higher. The ensuing FOMC Statement release did nothing either, although it really had no worthwhile news or change, other than to try and remove attention from the calendar and point more to an FOMC that would be data driven, rather than coerced by the passage of time. With enough new positions opened this week to keep me happy and generating some weekly income, I’d like to see prices strengthen a little bit more to have a better opportunity to see those positions set to expire this week either be assigned or get rolled over. Today wasn’t going to be that day, though. Luckily, there are still 2 more days to go. While I didn’t expect to make any new position trades yesterday, but did so, my expectations were even lower today, as they are on most Wednesdays when focus really turns to managing existing positions to close out the week or be put into position for subsequent weeks. No one was more surprised than me when I did sell Twitter puts. With today’s big economic news there was even more reason to just be a casual observer at the ready to sell calls on existing positions, but that opportunity never arrived. Instead, I chose to put more cash at risk for a week that doesn’t now look as if there will be too many chances to get additional income from rollovers or to replenish cash from assignments. Still, that could all change tomorrow. |
