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Daily Market Update – November 11, 2015 (7:30 AM)
For a while, it looked like yesterday might serve to heap on to Monday’s significant loss. There wasn’t too much of a reason for what was seen on Monday, but by mid-morning of Tuesday the decline seemed to run out of steam. There wasn’t much reason for it to have continued and there wasn’t much reason for it to have stopped, although some technicians could point to a very minor point of support at about 17663 on the DJIA, although they would be hard pressed to find anything really similar on the S&P 500. Sometimes things just happen. This morning, in the early futures trading, it appeared as if the trend higher that started yesterday morning was going to continue, but there’s really nothing to cause any significant kind of move in either direction as we awaited the flow of national retailer earnings that really started this morning with Macy’s. And is wasn’t good. What was needed from those retailers is collective optimism and not just cheery optimism regarding the future coming from the more high end among those in that sector. That definitely wasn’t the way the flow of earnings got off to its start. Macy’s painted a pretty bleak picture for itself and it hit retail across the board. That cheeriness that I was really expecting to hear couldn’t be based on higher per share profits, but rather from increasing revenue. That’s not the picture that was painted today. Investors might still be willing to accept lower earnings per share if there is some tangible increase on the top line, especially for those companies that can report relatively clean top line numbers and not have to drag currency exchange into the discussion. For the market to take a cue from retailers offering a positive view of what awaits them in 2016 there has to be some good news across the board, but especially at the middle level retailers. Maybe Macy’s is just a tad too high in the pecking order and maybe it doesn’t reflect what is really going on. But it does. At least the market believed so today as it hit that sector so hard after the disappointing news. In essence, we have to see people demonstrating that they are not only back at work and collecting a paycheck once again, but that they are also confident enough in being able to hold onto that job for a while, so that they could do something with those paychecks other than paying down debt. That’s something that’s been missing from the equation even as the unemployment rate begins to fall close to the levels that we usually refer to as “structural.” Following today, it now looks as if it’s definitely going to end up being a very quiet week for personal trading. With the opportunities for some ex-dividend trades now gone, at this point, if there are going to become actual new position trades, the greatest likelihood is that they would be paired with call sales for Thanksgiving week or beyond. That theme may continue through next week, with sights being set beyond next week’s monthly expiration and more toward December extended weekly options. |
