So far, the Street likes Q2 reports. At this juncture, expectations for Q4 and Q1 of 2014, are the key to a big rise or fall in stock prices.
Market action suggests the bulls are in charge. A correction is a high possibility between now and October, which would be a nice set-up for the “best six months for owning stocks (Nov.1 to May 1).”*
The biggest negative here is the fact the market has risen 7.5% in less than four weeks without a meaningful correction, and it did so in response to assurances By FRB presidents that any taper out of bond purchases would not reflect a tightening of credit. While the Street may buy that, any change in a five-year policy stands to have repercussions, warranted, or not.
Investor’s first read– an edge before the open
S&P 500: 1,692.39
Nasdaq Comp.: 3,579.27
Russell 2000: 1,052.20
Wednesday, July 24, 2013 (9:10 a.m.)
Apple(AAPL: $ 418.99) At the close, but stock soared in trading after the report.
AAPL will open up close to $20 a share this morning following earnings released after the close yesterday. While Q2 revenues were flat and earnings down 20%, the latter “beat” the Street’s projections. iPhone sales were the surprise, up 20% vs. a year ago..
Analysts will be revisiting estimates and we can expect some changes in ratings. AAPL has confirmed a double bottom at $385 and can be expected to attack resistance between $460 and $470, but not in a straight line. Support rises to $429
FACEBOOK (FB - $ 26.13)
Earnings are due today. Resistance is $26.25, Support $26, but the report will call the shot.
I DO NOT OWN, NOR HAVE I EVER OWNED APPLE OR FB.
ECONOMY: Economic reports continue to reflect a slowly improving economy, not anything that would prompt a change in the Fed’s policy of accommodation. Any acceleration in this tempo will raise concern that the Fed will begin to withdraw from its bond buying program.
While the Fed believes the Street now “get’s it,” that taper is not tightening, investors cannot be convinced of that, clearly not after the plunge in stock and bond markets after Bernanke’s June 19 comments about tapering starting in Q4 and ending in mid-2014.
For a detailed account of past and current economic reports, including charts go to: mam.econoday.com
PMI Mfg Ix. (8:58) Proj.: 52.8 July vs. 51.9 June
New Home Sales (10:00) Proj.: 481,000 rate June vs. 476,000 MAy
Durable Goods Orders (8:30) Proj.: +1.5 pct June vs. +3.7 pct May. Ex-trans +0.6 pct June
Jobless Claims (8:30) Proj.: 341,000 (7/20/13) vs. 334,000 prior week
Kansas City Fed Mfg. Ix. (11:00) Proj.: unchg vs. minus an index oif 5 in JUne
Consumer Sentiment (9:55) Proj.: 84.0 July
*Stock Trader’s Almanac
“Investor’s first read – an edge before the open”
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