Jul 22 2014

Economic Data & Earnings Heat Up

Market Recap:

Global bourses sold off on Monday as investors grew more and more anxious over the violence in Gaza and the rising geopolitical tensions between the world and Russia after the downing of Malaysian Airlines Flight MH 17. The Dow fell as much as 130 points before rebounding to close with relatively minimal losses. Sectors of the S&P declined, while commodities generally strengthened and Treasuries rallied with the benchmark Ten-Year yield falling below 2.5%. So far, earnings have impressed investors, keeping a floor underneath an otherwise shaky market.


Looking Ahead:

Economic data and earnings heat up on Tuesday, with Japanese all Industrial Index and U.S. Consumer Prices being released before the open, followed by the U.S. Redbook report, Home prices, Existing Home Sales, and the Richmond Fed Manufacturing Index. On the earnings front, Altria (MO), Apple (APPL), The Coca Cola Co (KO), Harley Davidson (HOG), Kimberly Clark (KMB), McDonalds (MCD), Microsoft (MSFT), Prologis (PLD), United Tech (UTX) report earnings on Tuesday.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our complete analysis of how the events in Ukraine and between Israel and the Palestinian territories will impact global markets, as well as a discussion on this and other critical subjects with S&P Capital IQ’s Sam Stovall. Visit our website www.ggfs.com for details.

Jul 21 2014

This Week’s Market Moving Events

Market Recap:

As we wrote and expected in the beginning of last week, market participants largely ignored geopolitical events and focused on earnings instead. However, the downing of Malaysian Airlines flight MH 17 by (apparently) Russian separatist in Ukraine may shift this dynamic over the coming days. More significantly from a market perspective, corporate earnings reports and earnings calls have been robust and positive so far, pushing stocks to new all-time highs.


Looking Ahead:

Earnings heat up for BJ’s, Mr. Softy, and HOG… while it will be a busy reporting week, there is also plenty of economic data to be digested. So far, markets have ignored geopolitical events, which I expect to continue over the coming week or two. However, I do expect market participants to tune into economic news more than they have in previous weeks. The “Be long or be wrong” moniker by market bulls may be running on thin air in the coming weeks. While a significant correction is unlikely, the air is getting thinner and prudent portfolio management rules indicate caution.


 

This Week’s Market Moving Events:

Monday: German PPI before the open, followed by the Chicago Fed National Activity Index. Halliburton (HAL) and Netflix (NTFX) report.

 

Tuesday: Japan all Industrial Index and U.S. Consumer Prices before the open, U.S. Redbook, Home prices, Existing Home Sales, and the Richmond Fed Manufacturing Index. Altria,, Apple (APPL), The Coca Cola Co (KO), Harley Davidson (HOG), Kimberly Clark (KMB), McDonalds (MCD), Microsoft (MSFT), Prologis (PLD), United Tech (UTX) report

 

Wednesday: Mortgage Applications, Eurozone Consumer Confidence, U.S. Petroleum Reserves, Chines Flash PMI Manufacturing and Japanese PMI (after 9:30 PM). ATT (T), Boeing (BA), Clear Channel home of our weekly radio show (CCO), Crown Castle International (CCI), Down Corning (DOW), Facebook (FB), Norfolk Southern (NFS) PepsiCo (PEP), and Tupperware (TUT) all

 

Thursday: Eurozone and German PMI, U.S. Jobless Claims and Consumer Comfort before the open, plus New Home Sales, Kansas City Fed Manufacturing Index, and Japanese CPI date are reported. 3M (MMM), Bristol Meyers Squibb (BMY) Caterpillar (CAT), Elli Lilly (ELY), Ford (F), General Motors (GM), Leggett & Platt (LEG), Raytheon (RTN) and Starbucks (SBUX) report earnings.

 

Friday:  TGIF (not the restaurant chain)…. U.S, Durable Goods at 8:30 AM and Tyco (TYC) report.

 

Make sure to tune into Money Matters with Gary Goldberg this Saturday and Sunday on WOR 710 AM Radio to hear our complete economic analysis and ongoing market commentary. Visit our website www.ggfs.com for details.

Jul 17 2014

Earnings Continued to Impress Investors

Market Recap:

Earnings continued to impress investors after the close Tuesday and ahead of the open on Wednesday. Moreover, increased merger activity – or at the very least proposed merger activity – lifted investor’s moods, along with a relatively robust Beige Report, which showed the economy growing at a moderate pace. Energy and Technology shares led markets higher, while the Healthcare and Financial sectors declined. Bonds and commodities also rallied on Wednesday, as investors bet on a modestly improving economic environment that will still require very low interest rates and Central Bank intervention.


Looking Ahead:

Earnings, earnings, earnings… that’s what will drive the market. In our view, market participants have clearly shifted into the “bullish” camp, believing that the combination of better economic data and strong earnings will not change overall monetary policy – in other words, the market is likely to keep climbing until some form of bad news turns the tide; i.e. geopolitical news and headline risks are unlikely to derail the bull-market.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our complete economic analysis and our ongoing market commentary. Visit our website www.ggfs.com for details.

Jul 16 2014

Fed Chairwoman Begins Two Day Testimony

Market Recap:

Market activity was muted on Tuesday, as investors held off on making significant portfolio moves ahead of critical earnings reports from Intel (INTC), Goldman Sachs (GS), CSX Corp (CSX), and Johnson & Johnson. Sectors of the S&P were mostly higher, with financial shares leading the charge after a strong report by JP Morgan (JPM) before the market open. Consumer Staple shares underperformed as market participants appear to be betting that earnings growth will be more robust than initially thought. Generally, we agree with this thesis, as there has been very little negative pre-reporting and full-year guidance for earnings has been rising. Separately, Fed Chairwoman Janet Yellen began her two day testimony in front of the Senate Banking Committee, known as the Humphrey Hawkins testimony. Little new information was revealed during the discussions so far. However, Dr. Yellen did indicate that she was growing more concerned with asset bubbles and “stretched” valuations in various sectors of the market. In spite of the cautionary comments, stock trading remained benign and uneventful. Treasuries dropped slightly, and commodities were also mostly lower.


Looking Ahead:

Earnings reports were generally positive after the close of trading on Tuesday, setting the stage for a positive open on Wednesday. On the earnings front, Abbott Labs (ABT), Bank of America (BAC), Black Rock (BLK), EBay (EBAY), and Yum Brands (YUM) are among the widely followed companies reporting on Wednesday.

Make sure to tune into Money Matters with Gary Goldberg on Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our complete economic analysis, a great interview with the original producer of the Tonight Show, as well as our ongoing market commentary. Visit our website www.ggfs.com for details.

Jul 15 2014

Dividend Paying Stocks over Technology Shares

Market Recap:

Positive economic news from Europe and Asia along with strong earnings reports by Citi Group lifted investor’s mood and stock prices on Monday. The Dow Jones Industrial Average rose by 111 points, as investors favored dividend paying stocks over technology shares and growth stocks. In a reversal of fortune from the recent trend, Utilities were the sole sector in negative territory for the day, while commodities generally rose and Treasuries sold off slightly.


 Looking Ahead:

Fed Chairwoman Yellen has the privilege of answering congressmen’s questions today as she kicks off a 2 day annual Humphrey Hawkins testimony on the state of the economy. We don’t expect anything news to come out of the meetings, with the most likely theme being that while the U.S. economy continues to make improvements, support and vigilance is still paramount to ensure we don’t fall back into a recession. This morning JP Morgan released earnings that significantly beat Wall Street analyst forecast, helping to lift equity futures in pre-market trading.

Make sure to tune into Money Matters with Gary Goldberg this Saturday at 2:00 PM and Sunday at 11:00 AM on WOR 710 AM Radio to hear our complete economic analysis, a great interview with David Berg regarding the Tonight Show with Jay Leno and a very special interview with the great Billy Harbach,  who produced the very first Tonight Show and later brought Johnny Carson on as host. Visit our website www.ggfs.com for details.

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