The main reason for the market doing so well lately is that not only have earnings been projected higher at a 10.8% gain for the second-quarter…but 73% of companies are beating their estimates. This is the highest level in nine years. With one hour to go in today’s market session, the DOW is up 42 points, the S&P is flat, and the NASDAG is ahead by 2 points.
TSLA has made a tremendous intraday turnaround ahead of its report tonight. Are these buyers as “smart” as the late AAPL buyers were yesterday? AAPL has gained 8 points or 5% today in the correct anticipation for the buyers of Apple Computer yesterday. In addition, other large technology leaders have come off of their worst intraday levels, thereby helping the NASDAQ stay above water today.
Breadth numbers are weak due to a large decline in the Russell 2000 Index at almost a 1 to 2 downside ratio. The VIX is idling around 10.
If the DOW makes the 22,000 level at the close, it can thank component BA. This company alone has been responsible for an astounding 405 points out of the 1,000 points in its climb from 21,000 to current levels.
ADP came out with its estimate for Friday’s jobs report at 178,000. This is close to the consensus of 180,000 but let it also be remembered that they were way off last month with a very low estimate.
Bond yields are a little higher at 2.27% for the 10-year Treasury Note while the dollar weakens again. The Euro up to 1.183 and this greenback softness. The DOW is ahead by11% this year and the dollar has declined by 11%. The lower value of the greenback has allowed for increased sales of American products overseas.
Donald M. Selkin
Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters and the Associated Press.