The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Some optimism
Futures climbed some in the wee hours and set the stage for a bullish session. The index opened about +40 and climbed somewhat further by lunch. The index came within 5 points of a new all-time high but rolled over in the afternoon, retracing about 45 points. The day finished with a small gain, a weak but welcome answer to the last two down days. Yields didn’t move much but they did go from down in the morning to up at the close. Capital flow was slightly elevated at 109%.
Goldman Sachs, Morgan Stanley, and Blackrock announced their earnings this morning and all three results were rewarded by the market, each stock climbed 4-6%. Even though the financials didn’t lead the market higher today, the sector did gain. Considering its overhanging issues, this is an important change. This could be a signal that the market is looking to brush most other news aside and concentrate on corporate results. If true, this is a bullish turn.
We might not be off to the races just yet however. We are still waiting on the Supreme Court and its decision concerning the President’s tariffs. We don’t know when the decision will come. It was initially expected last Friday. I don’t think the delay can be interpreted one way or the other. It’s a day-to-day item and markets are waiting for it, but not anxious about it. When the decision does arrive, it will push investor attention, at least for that day, to the macroeconomic landscape. Earnings season will move to the back burner again.
Maybe that allows for opportunities among the single stock pickers out there? Something to keep in mind if you have a few favorite names.
Anyway, markets don’t have much conviction currently. They are moving small and without persistent momentum. The latest sentiment shift is nice for the longs but if they are hoping for big percentage moves, it’s going to require some headline assistance.
See you tomorrow.
-Mike
Visdom Market Commentary
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