Daily Market Update – October 14, 2015 (Close)




Daily Market Update – October 14,  2015  (Close)


Yesterday was another pretty boring day made even more so by having had my internet and cable connections restored.

The day started with some disappointing earnings by Johnson and Johnson that couldn’t be ignored even after the announcement of a big stock buyback and ended with a less than enthusiastic reception from investors after the market closed when both JP Morgan and Intel reported earnings.

The early response to the Intel earnings may paint a picture of what this new earnings season may be like, as the initial response was actually a very positive one, as the earnings were better than expected. Not too long afterward the selling started and reasonably good news was treated as if it was disappointing.

Of course, just when you think you have it all figured out, Intel turned around beautifully even as the overall market just crumbled away.

Early indications this morning, however, from Bank of America and Wells Fargo were showing their early earning gains as holding up, but their conference calls still awaited and Wells Fargo wilted, while Bank of America at least kept its head above water..

So this morning’s futures were again flat, as that had been the theme for this week, so far, but the market paid no attention to that and went its own not so merry way that just got less and less merry as the day wore on.

With a couple of new purchases for the week and now entering the mid-point, I thought that I was likely done spending money for the week and would instead have loved to have simply had the opportunity to do anything to generate some more income for the week.

Instead, there was more parting of the ways with cash and some more opportunity to generate cash, thanks to some strength in precious metals.

After a few weeks of large moves, this week, was looking as if it was  shaping up as one for everyone to just sit back and take a deep collective breath.

So much for appearances.

From a technician’s point of view a breather would have been a very good thing following a very quick 6% move higher, just as developing a period of stability after a large drop would be considered to be a good thing.

Having these periods of collection is usually a sign that those who are prone to rash trading have been flushed out and more rational minds can prevail, even if their time period for dominance can be measured only in minutes sometimes.

I don’t know where those rational minds went today, because despite Wal-Mart’s glum news, there really wasn’t much reason for the market to follow along.

For now, things do still seem rational, but there really hasn’t been much in the way of news that can elicit a market response. While we will be getting a torrent of earnings coming in over the next two weeks, the real news may just end up being the more macroeconomic stories that can be interpreted as having an influence over the FOMC as they prepare to have their October meeting.

Until then, though, it will be a focus on individual names and at some point there may be an over-riding theme, as there has been for the past couple of quarters. 

That theme has been missing on the top line and beating on the bottom line.

While everyone loves to see profits it doesn’t necessarily paint a very positive picture when comparative revenues are down or less than expected, even as profits may increase, especially when those profits are being reported on a per share basis and the denominator of shares is shrinking.

Or when the profits come as a result of cost savings, such as was the case for Bank of America this morning, which reported a quarter with significantly lower legal costs and
was actually suffering from some of the bigger picture issues that JP Morgan reported.

That over-riding theme hasn’t been the most conducive for the market to continue its move higher, even though for the longest time the market did ignore the illusion of profits.