|
Daily Market Update – April 27, 2016 (Close) The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long. The fireworks may have started after the closing bell with some big disappointments in earnings. Those may be mollified this morning in the futures as oil was again up in the 2-3% range. Later, the really big news could have come as the FOMC Statement was released and we could all wonder about the nuanced meanings behind each and every word. Instead, the market traded in a range of only 150 points as no one was expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never can know. The FOMC didn’t change rates, but they did suggest the economy was worthy of their confidence. Whatever that may mean. Apparently, no one really knew, but the overall idea was that whatever happened wasn’t bad. Maybe it was even good. Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices. So far, the answer has been a big, fat, “nothing.” That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night could have made the morning an attractive one as the morning got ready for trading. Oil, though, saved the day. Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings. In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg. So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop. With the FOMC looming overhead, though, there may have been reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft. Ultimately, it didn’t matter. But if you are still long oil and commodities, it was another good day. |
