Markets Succumb To Weak Earnings & Data
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January 27, 2015

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Economic data was highlighted negatively at first by a sharp decline in Durable Goods Orders which fell 3.4% vs 0.7% expected & prior revised lower from -0.7% to -2.1%. Ex-Transportation the reading was also weaker falling to -0.8% vs 0.8% expected & prior revised lower form -0.4% to -1.3%.

Then markets were hit by a series of negative earnings reports from Microsoft (MSFT), Caterpillar (CAT), Proctor & Gamble (PG) and overseas heavyweight Siemens (SI). Markets didn’t like any of this and took stocks much lower early.

Then some better economic data included an outsized pop in Consumer Confidence (102.9 vs 96 expected & prior 93.1. What cause this in my opinion was lower gas prices but some suggested the responses expected better wages coming. Below are some charts reflecting this.  

1-27-2015 6-44-19 PM Confidence

 

1-27-2015 6-48-54 PM consumer gains

 

1-27-2015 6-50-21 PM PMI

New Home Sales rose to 481K vs 452K expected & prior revised from 438K to 431K marking 7 straight months of downward revisions.

1-27-2015 6-50-44 PM New Home sales

 

The S&P Case-Shiller HPI rose slightly to 0.7% vs 0.6% expected & prior revised lower to 0.7% from 0.8%. Not seasonally adjusted fell to -0.2% vs -0.2% expected and pri-o.1%. Below is the complete chart of city prices.

1-27-2015 6-51-23 PM case Schiller

 

While there was a move to recover stock prices off the lows that only succeeding modestly as most indexes were down over 1.5%. There is ongoing worry about Apple’s (AAPL) earnings thinking the price may have overshot reality as noted HERE. But the after-hours release of earnings shows the company with a large beat on iPhone 6 sales.

There was also a rally in crude oil prices as wire reports from the King Abdullah’s funeral. There meetings were held with the new king and foreign ministers from Norway, Switzerland, Finland and Russia with the speculation being to stabilize oil prices. This led to a short squeeze in crude oil.

Leading market sectors higher included: Bonds (TLT), Gold (GLD), Silver (SLV), Gold Miners (GDX) Oil Services HOLDERS (OIH), Russia (RSX), Brazil (EWZ), Solar (TAN), Euro (FXE), Crude Oil (USO), Natural Gas (UNG) and Commodity Tracking ETF (DBC).

Leading market sectors lower included: Everything else.                                                                     

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

Volume increased from Monday and breadth per the WSJ was negative.

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1-27-2015 6-51-47 PM Diary

 

Charts of the Day
  • SPY 5 MINUTE

    SPY  5  MINUTE

  • SPY DAILY

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  • SPX WEEKLY

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    Pick3

  • INDU WEEKLY

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  • RUT WEEKLY

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  • NDX WEEKLY

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  • XLB WEEKLY

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  • KBE WEEKLY

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  • XRT WEEKLY

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  • XLP WEEKLY

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  • FXU WEEKLY

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  • ITB WEEKLY

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  • IYR WEEKLY

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  • IYT WEEKLY

    IYT  WEEKLY

  • IBB WEEKLY

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  • IGV WEEKLY

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  • TLT WEEKLY

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  • FXE WEEKLY

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  • GLD WEEKLY

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  • GDX WEEKLY

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  • DBB WEEKLY

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  • USO WEEKLY

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  • DBC WEEKLY

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  • EFA WEEKLY

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  • EWG WEEKLY

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  • EWU WEEKLY

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  • RSX WEEKLY

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  • EPI WEEKLY

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  • 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.

Earnings news combined with weak Durable Goods Orders undid markets Tuesday. Apple (AAPL), Yahoo (YHOO) and US Steel (X) all surged ahead after the close of trading on superior earnings results.

Wednesday is all about the Fed. Will they acknowledge some economic weakness or is everything fine and dandy with any disappointments just “transitory”.

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
Gold1,293.0010.700.84 % 16:49
WTI Crude Futr45.980.831.84 % 16:19
Index Quotes Change Change % Local
CRB217.911.870.86 % 16:28
US Dollar94.26-0.01-0.01 %16:43
Index Quotes Change Change % Local
VIX17.221.7010.95 % 16:14
MSCI Value Daily MTD YTD
Brazil1827.897-0.82 %-0.24 %-0.24 %
Russia429.100-5.26 %5.97 % 5.97 %
India543.4210.00 %9.47 % 9.47 %
China69.549-0.01 %5.32 % 5.32 %