Alcoa is the first DOW stock to report earnings, and as such, many look to it to gauge market earnings for the quarter. Jim Cramer recently wrote that "Alcoa means everything". Here are some excerpts from Marek Fuchs suggesting that may not be the case.
WHY CRAMER IS WRONG ABOUT ALCOA’S EARNINGS…(Yahoo Finance)
"Manufacturing amounts to only 15% of the national economy, with the sectors Alcoa peddles to a fraction of that…Alcoa earnings estimates have been cut 25% in recent months, down to a consensus of 6 cents a share from about 8 cents in October...Earnings beats of recently trimmed numbers don’t mean as much or have as lasting an impact. By the same token, misses of freshly cut estimates imply that business is degrading at a quick pace or management has no bead on what is going on. Or both…In the final estimation, Alcoa’s earnings aren't entirely meaningless. But they're just one piece of a complex economic and earnings puzzle." – Marek Fuchs. For the full story visit…
http://finance.yahoo.com/blogs/the-exchange/why-cramer-wrong-alcoa-earnings-investors-know-230105528.html
Who’s right – Cramer of Fuchs? The market may tell us tomorrow depending on the Alcoa earnings report.
ALCOA
Alcoa reported revenue about 5% ahead of expectation. Earnings met expectations at 6-cents per share. Guidance was good. Wall Street liked the result and Alcoa’s share-price rose 2% in after-hours trading.
Overall, the market earnings expectations are low. Dan Greenhaus, chief global strategist at BTIG, wrote in a research note Tuesday; "Excluding financial stocks, however, earnings are only expected to rise 0.5%..." For more on the subject see CNN/Money at…
http://money.cnn.com/2013/01/08/investing/alcoa-earnings/index.html
Here’s a comment making a point very similar to my post yesterday regarding the VIX.
WHY VIX’S RECENT PLUNGE MAY BE BAD FOR STOCKS (CNBC)
"After a historic decline, market volatility really has no place else to go but up.
In the near-term that's probably bad news for stock prices, which have rallied in 2013 but likely are in for a rough ride over the next several weeks.
…The VIX, as it is known, is a popular measure used to gauge market fear by measuring futures activity on the Standard & Poor's 500. A low reading is generally associated both with investor complacency and rising stock prices."
Full story at
http://www.cnbc.com/id/100359775
MARKET RECAP
Tuesday the S&P 500 was down about 0.3% to 1457 (rounded). VIX fell about 1.2% to 13.62.
NTSM
The numbers in the NTSM analysis are BUY Tuesday because the Sentiment reading has improved to neutral, leaving positive numbers for Price, Volume and VIX; but, as I’ve suggested before, I will not get back in the stock market until the market breaks its prior high. "The trend is your friend" and so far, the market has not shown me that the trend can get above the old highs of 1466. Of course, if the S&P 500 can pull back into a legitimate correction, I might have a good buying opportunity.
MY INVESTED POSITION
Based on the SELL signal, 7 November 2012, I moved out of the stock market at 1377 on the S&P 500. Because of the negativity I have noted from Hussman and others, I am currently invested in a range of near 15% invested in stocks
