Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
A lot of names report tonight – the most market moving being IBM and Google. IBM is the largest Dow component and missed on the top line significantly. As always it is easier to (ahem) “manage” the bottom line [earnings] versus revenue. The stock is down significantly in after hours and if things don’t change tomorrow will pressure the DJIA. Google (GOOG) has been selling off for the past few weeks and hence had a low bar which it has passed = up a few % in after hours. Nothing fantastic in the report, it was average and the stock was beaten down recently. Other names of interest – Intuitive Surgical (ISRG) down significantly in after hours and Chipotle Mexican Grill (CMG) up significantly. Microsoft (MSFT) up some as well on a ho hum report.
Mixed bag but generally the early theme in earnings season is revenue growth is getting harder to come by and even with so many companies guiding analysts down on EPS we are not seeing a lot of shoot out the lights on the bottom line either. We’ll see if they can pump some life into IBM by tomorrow premarket as it will influence things.
Of course market bulls will yell about P/E multiple expansion due to QE and that’s been the winning idea for months. It works, until it doesn’t.
We are getting a lot of 3 PM rallies of late – a bit suspicious… today there was about a .45% rally between 3 and 3:45 PM. I think one day earlier this week we had a 0.4% rally in the same time frame. So this is not allowing for a purging type of selloff – more like a slow pull off of band aid.
1538 is very key as we saw today at 3 pm.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
