Yesterday I indicated I felt the stock market rebounded too sharply and needed a consolidation with support at DJIA 12,275 (S&P 500: 1307). I hold to that.
Whether, those levels hold is questionable.
Can Q2 earnings reports bail us out ?
Maybe not. Estimates for the S&P 500 companies now run at a gain of 13%, vs. +18% in Q1 and 37% for all of 2010. For 2011 as a whole earnings are expected to be up 19%, estimates for 2012 run about +14%
Brooksie’s Daily Stock Market blog: An edge before the market opens.
Friday, July 8, 2011 9:23 am EDT
DJIA: 12,719.49
S&P 500: 1353.22
Nasdaq Comp.: 2872.66
Russell 2000: 858.11
“Poof ! Negatives Could Vanish in a Heartbeat….If…” was my June 15 headline with the DJIA: 12,076).
The negatives at the time were focused on the softness in the U.S. economy, a mounting concern for raising the U.S. debt ceiling in time to avoid a default on certain obligations, and Greece’s financial problems.
I reasoned that investors shouldn’t get too discouraged with falling stock prices, that these were the kind of negatives that could vanish quickly.
On June 23, the stock market rebounded abruptly from an oversold condition. That rally got further momentum on news that Greece avoided default and some indicators suggested the economy’s soft patch was not gaining strength.
Additionally, reports of progress in reaching an accord in Congress for long-term deficit reduction and consequently the decision to raise the nation’s debt ceiling drew investors off the sidelines.
O.K., Greece vanished, at least for the moment, but uncertainty persists about the debt ceiling and today’s spastic employment situation report of plus 18,000 new jobs and unemployment at 9.2% keeps concerns for the economy front and center.
That number stinks, but it is countered by the Employer Services report Wednesday that showed companies hired 157,000 new employees in June, twice as many as in May, as well as the report that same store sales in June beat expectations. Sales advanced smartly 7,2% vs a year ago, topping projections of 5.6%, according to Retail Metrics
Recent Headlines :
“Is the Fix In” ? (June 16 – DJIA: 11,897)
“Quadruple Witching Friday –Buying Open Risky” (June 17 DJIA 11,961)
“Ugly ! Nevertheless, the Outlook Can Change Quickly” (June 20 – DJIA 12,004)
“No Time For Napping” – (June 21 DJIA: 12,080)
“No Hope in Sight ? Don’t Bet on IT ! Prepare for Opportunity” – (June 22, DJIA: 12,190)
“Countdown to Opportunity – Start Preparing !” – (June 23 DJIA 12,109)
“ BIG Money Nibbling – Stocks Beginning to Look Attractive – Negatives can Vanish” (June 24 DJIA:
12.050)
“Institutions Showing Interest – Not Reaching Yet” (June 27 DJIA: 11,934)
“Will Q2 Earnings Reports and Congressional Action on Debt Ceiling” (June 28 DJIA 12,043)
“ Don’t Buy News on Greek Vote – Spike to Be Short-Lived” (June 29 DJIA: 12,188)
“Again: Debt Ceiling Approval and Q2 Earnings Catalysts” (June 30 DJIA: 12,261)
“Enjoy the Fourth ! Prepare for Fireworks in Weeks Following” (July 1 DJIA: 12,414)
“Did Someone Blink ?” (July 5 DJIA 12,582)
“A Pause is Needed Here to Digest Recent Gains, Q2 Earnings Ready to Take Center Stage” (July 6
DJIA 12,569
George Brooks
[email protected]
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The writer of Brooksie’s Daily Stock Market blog, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk
