Daily Market Update – September 27, 2016 (Close)
Markets looked as if they were going to open on the calm side this morning after posting two consecutive triple digit losses for the first time since the Brexit vote.
There wasn’t much of a reason for either of the past two declining days, just as there’s not too much reason for any significant moves for the rest of the week, except perhaps Friday.
Of course, when there’s no reason, there’s reason to suspect just the opposite and that was again the case today, but this time in a different direction.
Today, it looked as if the markets may have taken their cue from Asian markets, but the buying accelerated as oil began falling, on news that it wasn’t too likely that anyone could agree on production cut backs.
That, at least, was nice to see.
Finally, a normal response to a supply side glut of oil.
With that done, maybe the market will gravitate toward calmness until Friday. That’s when the GDP is released and a surprising number could really move markets that are now expecting that there will be an interest rate increase in December. That would probably require some positive economic news and the GDP is a good place to start, especially if there are some upward revisions.
In the meantime, there are still lots of Federal reserve members set to speak this week and any of them has the power to move markets, even if only for a few hours until a counter-position is voiced.
With a purchase of shares yesterday that happened to be ex-dividend today, I don’t expect to be spending much more money this week, unless it looks as if I will be able to realize some new cash from those positions whose short option contracts expire this week.
There’s little reason to expect any sustained move higher while we await December, but with earnings about to start again in 2 weeks, it will be interesting to see whether or not companies are seeing anything hopeful ahead.
Any optimistic guidance would be welcomed enthusiastically by markets, as it has been a really long time since companies have pointed toward better times ahead.
With corporate earnings less buoyed by buybacks, sooner or later investors are going to demand earnings that are actually real earnings and those investors are very likely to reward real earnings improvements.
You would think that if the FOMC projects that the economy should be able to warrant a small increase in interest rates that there would be some good corporate earnings news ahead, as well.
But that still remains to be seen and I think that may still be another quarter into the future before companies start going out on a limb and say that the future looks better.