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.
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"
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
|WTI Crude Futr||45.36||-0.95||-2.05 %||16:20|
|US Dollar||95.28||0.62||0.65 %||16:43|
|Brazil||1886.355||1.81 %||2.95 %||2.95 %|
|Russia||448.143||4.12 %||10.67 %||10.67 %|
|India||537.227||0.27 %||8.23 %||8.23 %|
|China||68.653||0.32 %||3.96 %||3.96 %|