“Procter & Gamble Co. stock slumped Tuesday after the Cincinnati-based company reported second-quarter earnings that failed to meet analyst expectations in large part because of what CEO A.G. Lafley described as "unprecedented currency devaluations" in foreign countries where P&G sells consumer goods.” Story at…
http://www.bizjournals.com/cincinnati/news/2015/01/27/p-g-profits-plunge-amid-unprecedented-currency.html
P&G upset the market this morning, along with Caterpillar, Microsoft and a few others who cited the strong dollar as a cause of poor earnings. This is the problem for investors. Will the strong dollar upset the apple cart? Maybe not. It didn’t upset Apple’s cart as AAPL reported very strong earnings after the close today. Apple was up around 5% in afterhours trading and that should carry-over into tomorrow.
DURABLE GOODS ORDERS (WSJ)
“U.S. businesses broadly cut capital spending in the final months of 2014, raising red flags about the economy’s ability to sustain momentum amid troubles around the globe. Orders for durable goods—products like cars and kitchen appliances designed to last at least three years—fell 3.4% in December from a month earlier…” Story at…
http://www.wsj.com/articles/durable-goods-orders-fall-sharply-in-december-1422365940
CONSUMER CONFIDENCE - HIGHEST SINCE 2007 (WSJ)
“U.S. consumers turned exceedingly upbeat about the
economy at the start of 2015, according to a report released Tuesday. The
Conference Board, a private research group, said its index of consumer confidence jumped to 102.9 in January
from a revised 93.1 in December…” Story at…http://www.wsj.com/articles/u-s-consumer-confidence-surges-to-highest-level-since-2007-1422371844
MARKET REPORT
-Tuesday, the S&P 500 was down about 1.3% to 2030 (rounded). (The Russell 2000 was down only 0.5% today.)
-VIX fell about 11% to 17.22.
-The yield on the 10-year Treasury Note declined slightly to 1.82%.
Today was down on news from P&G, Caterpillar, et al, as noted above, but Volume was not very heavy today on the NYSE for such a big move down. That’s either due to the snow or it indicates lack of fear, so there may not be a follow-thru of selling tomorrow.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) remained 54% at the close Tuesday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +280. (It was +204 Monday). The 10-day moving average of change in the spread increased to +25. In other words, over the last 10-days, on average, the spread has INCREASED by 25-each day.
Internals improved again (as noted yesterday), but remained neutral on the market due to low advancing volume. Overall, internals still look good.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The NTSM analysis is HOLD. The PRICE indicator is positive; VIX is negative; other indicators are neutral.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested in stocks in the
long-term portfolio. 50% is conservative, but appropriate for a retired
guy. I sold trading positions in QLD and XIV in the morning (good profit on XIV; small gain on QLD) since it looked like the day was going to be rough and I don’t like holding leveraged positions when news indicates that the potential for loss is high. I also had obligations and was not able to watch the market during the day. I may regret selling, but a gain is a gain.
