Bears are nowhere to be seen at present. Many bears are calling for a market top, or at the very least, a correction. But any attempts to fade this market thus far have led to bear traps. Now that I posit this, maybe this will all change.
Clearly Apple (AAPL) given its heavy weighting in most tech indexes continues to lead markets higher. Do you really need a new phone with a larger screen? Applephiles will say, you’re damn tootin’! The company did report earnings that slightly beat estimates and guided lower but this negative note only fazed investors temporarily last night. Wednesday all was well and the stock rallied nearly 3%.
Other earnings reports, especially from industrial names like Boeing (BA) and Caterpillar (CAT) were not impressive and heavyweight McDonald’s (MCD) saw analyst downgrades.
Overseas China stocks rallied on mere speculation the government will promote stimulus measures to boost growth. The government may engage in “monetary easing and support the housing market,” said Benjamin Tam, a fund manager who helps oversee about $1.5 billion at IG Investment Management (Hong Kong) Ltd. “People are still optimistic that the government policies will support growth in China. All of that is positive and that’s why the market is moving higher.” This is the speculative chatter driving up shares.
Leading market sectors higher included: Tech (QQQ), Materials (XLB), Energy (XLE), Healthcare (XLV), Biotech (IBB), Internet (FDN), China (FXI), Turkey (TUR), Australia (EWA), Crude Oil (USO) and Australia (EWA).
Leading market sectors lower included: Gold Miners (GDX), Industrials (XLI), Brazil (EWZ), Solar (TAN), Semiconductors (SMH) and Silver Miners (SIL).
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume plunged Wednesday and breadth per the WSJ was positive. However, looking at the Money Flow things didn’t look great especially for Financials.
Thursday will yield economic data from Jobless Claims, PMI Mfg Index Flash and New Home Sales. Earnings will include among others, 3M, Amazon, Baidu, Caterpillar, D.R. Horton, Eli Lilly, Ford, Hershey and Visa.
Let’s see what happens.
Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.
He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio".