Market Comments
Today marks the 12th anniversary of the attacks of September 11th. I would be remiss if I didn’t take a moment to remember those whose lives were cut short by those attacks and also offer my deep admiration for those who serve and put their lives on the line to protect this great nation of ours; Thank you.
For the markets, it was a day of celebration in a sense. Not because there was any particularly bullish economic data here in the states or even a bevy of good earnings. Today’s rally seemed mostly technical as the S&P has recaptured the 50 day moving average with good momentum.
The turn-around (rally) should hold until the next FOMC meeting or until a bit of data pushes us (or the FOMC) in an undesired direction.
The smart money is not behind this rally according to many experts and from the flows, trading patterns and option action that I am seeing. Massive amounts of cash have actually been exiting the big index ETFs as of late and overall stock volume looks about as strong and convincing as thatbaby Lemur from the movie Madagascar.
While we have to watch the warning signs, there is still a bullish undertone that is controlling many stocks and stocks are still growing earnings (a little). Because there are still lack of alternatives, stocks remain resilient on average.
Now is not the time to be making big bullish long term bets, but rather seek those great companies that ARE growing earnings and showing other signs of strength like QUALCOMM, who today announces a $5 billion stock buyback.
Sticking with the tech theme, Apple shares got pummeled 5.4% after several analysts downgraded the stock (this is why I didn’t want to buy the stock yesterday on Bloomberg and instead opted for a cheap call spread). With blood in the water, Carl Icahn announced today that he’s buying the stock here because it’s a “no-brainer;” I think he’s feeling some pain and trying to use his magic touch to get the shares back up. 🙂
I’m not in the Icahn camp here; I was disappointed by Apple’s event yesterday, which lacked talk of any other exciting products like a watch or TV and the company also failed to nail down a deal with China Mobile (whose customer base is more than twice the US population).
The company is starting to feel like Microsoft to me and I’ve about given up hope on the stock ever becoming a growth story again. The leadership, news and product flow will probably end up putting this stock in a $30-$50 range around $500 as it just fades into the tech landscape with barely a pulse.
As the announcements were being made by Apple, I was imagining the executives at Google and Samsung giggling with another ho-hum iPhone update and the release of over-priced “cheap” iPhones that don’t even put the company in the running for inexpensive devices in most countries and among the non-Apple owners here in the US.
I’d expect Google and Samsung to continue to grab market share from the once mighty “I” brand and maybe even Microsoft will release a really cool product now that they own Nokia (which Apple should have bought).
Apple just can’t seem to get the love back…
The iPhone maker’s selloff kept the NASDAQ in negative territory today as most of the major indexes moved higher; The Nasdaq ended down 4.01 points, or 0.1%, to 3,725.01.
The S&P 500 added 5.14 points, or 0.3%, to end at 1,689.13, with consumer staples the best performing of its 10 major industry groups for the 7th straight session.
The Dow Jones rose 135.54 points, or 0.9%, to 15,326.60. If you weren’t aware, the Dow is going through some big changes. Goldman Sachs Group Inc., Visa Inc. and Nike Inc. will be added to the Dow, replacing Bank of America Corp. (BAC), Hewlett-Packard Co. (HPQ) and Alcoa Inc. (AA) in the biggest reshuffling since April 2004.
