Morning After Earnings Disappoint
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January 23, 2015

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Market volatility causes half of Thursday’s gains given back.

Earnings disappointments were the primary cause for the declines as the warm feelings about ECB QE faded.

Particularly notable was a weak earnings report from economically sensitive UPS where the company reported earnings of only $1.25 vs $1.47 expected. It’s significant since the company cited slow domestic business as the reason. Dow heavyweight McDonald’s fell on earnings and outlook which crimp’s consumer spending.

This might mean that the economy isn’t as rosy as those prone to “happy talk” would have you believe.

To wit economic data released Friday included: China PMI came in better at 49.8 vs 49.5; Chicago Activity Index was negative at -0.05 vs prior 0.73; PMI Manufacturing Index Flash flat 53.7; Existing Home Sales rose to 5.04M vs 4.92M but fell YOY for first time in two years; and, Leading Indicators rose slightly to 0.5% vs 0.4%.

Eurozone stocks rallied once again Friday but priced in dollars less encouraging as the euro continues its slide. Crude oil and most other commodities continue their downtrends.

Leading market sectors higher included: Utilities (XLU), Retail (XRT), Dollar (UUP), Natural Gas (UNG) and Bonds (TLT).

Leading market sectors lower included: Just about everything else.                                                                   

The top 20 market movers by percentage change in volume whether rising or falling is available daily.

Volume was lighter than previous days this week and breadth per the WSJ was negative.

1-23-2015 7-12-39 PM dIARY

 

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

    Pick3

  • SPX WEEKLY

    SPX WEEKLY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • XLB WEEKLY

    XLB WEEKLY

  • XLE WEEKLY

    XLE WEEKLY

  • XLF WEEKLY

    XLF WEEKLY

  • KRE WEEKLY

    KRE WEEKLY

  • XLI WEEKLY

    XLI WEEKLY

  • XLY WEEKLY

    XLY WEEKLY

  • XRT WEEKLY

    XRT WEEKLY

  • FXU WEEKLY

    FXU WEEKLY

  • XLV WEEKLY

    XLV WEEKLY

  • ITB WEEKLY

    ITB WEEKLY

  • IYR WEEKLY

    IYR WEEKLY

  • TLT WEEKLY

    TLT WEEKLY

  • UUP WEEKLY

    UUP WEEKLY

  • FXE WEEKLY

    FXE WEEKLY

  • FXF WEEKLY

    FXF WEEKLY

  • FXY WEEKLY

    FXY WEEKLY

  • GLD WEEKLY

    GLD WEEKLY

  • GDX WEEKLY

    GDX WEEKLY

  • SLV WEEKLY

    SLV WEEKLY

  • DBB WEEKLY

    DBB WEEKLY

  • DBA WEEKLY

    DBA WEEKLY

  • USO WEEKLY

    USO WEEKLY

  • DBC WEEKLY

    DBC WEEKLY

  • EFA WEEKLY

    EFA WEEKLY

  • VGK WEEKLY

    VGK WEEKLY

  • EEM WEEKLY

    EEM WEEKLY

  • EWZ WEEKLY

    EWZ WEEKLY

  • RSX WEEKLY

    RSX WEEKLY

  • EPI WEEKLY

    EPI WEEKLY

  • FXI WEEKLY

    FXI WEEKLY

  • NYMO DAILY

    NYMO  DAILY

     


    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.


     

  • NYSI DAILY

    NYSI DAILY

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.


     

  • VIX WEEKLY

    VIX WEEKLY

     


    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.

Even with Friday’s selling the performance on the week was positive. But the impetus for the rally was the ECB’s QE. Now investors return to watching for earnings come in and Friday wasn’t a good day for those.

Next week is another Fed meeting Wednesday and some of their language from December needs to be clarified especially Yellen’s big gaffe.

Let’s see what happens.


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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"



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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com

 

ETF Digest

Market Summary
NYSE Composite Index S&P 500 Index Nasdaq Composite Index Russell 2000 Small Cap Index NYSE Composite Index S&P 500 Index Nasdaq Composite Index Russell 2000 Small Cap Index 10 Year Treasury Note Yield Gold Bugs Index Morgan Stanley High Tech 35 Index Market Chart
Commodity Quote Change Change % NY
Gold1,280.80-14.30-1.11 %15:25
WTI Crude Futr45.24-0.35-0.77 %14:50
Index Quotes Change Change % Local
CRB216.05-0.56-0.26 %15:07
US Dollar95.13-0.18-0.19 %15:03
Index Quotes Change Change % Local
VIX15.99-0.67-4.02 %14:47
MSCI Value Daily MTD YTD
Brazil1842.948-2.30 %0.58 % 0.58 %
Russia452.9201.07 %11.85 % 11.85 %
India543.4211.15 %9.47 % 9.47 %
China69.5541.31 %5.32 % 5.32 %