-USA börsipäev peaks algama kergelt negatiivse meeleoluga. Olemasolevate majade müük on täna olulisemaks majandusnäitajaks, mis avaldatakse kell 17.00. Veebruari 6,12 miljonilt ühikult oodatakse tõusu 6,18 miljonile ühikule. Teiseks oluliseks näitajaks on aprilli tarbijausaldusindeksi avaldamine.
-USA suurim telekomioperaator Verizon Communication (VZ) teatas oma tulude vähenemisest esimeses kvartalis, peamiseks põhjuseks pensionifondi kulude kasv.
-US Airways (UAIR) teatas 177 miljoni dollari suurusest kvartalikahjumist. USA suuruselt 7. lennukompanii tuli aasta tagasi välja pankrotist, kuid juhtkonna sõnul on vaja veelgi oma ärimudelit muuta.
Rev Shark:
It is always difficult to plan how to deal with the market, but lately it has been even more difficult as the primary driving force shifts back and forth between interest rate concerns and solid fundamental news. On Thursday and Friday, we saw some strong action on good quarterly earnings reports, but then yesterday we saw the positive mood of the market turn negative after a better-than-expected new home sales report raised interest rate concerns.
Earnings season has generally been very good. Investor's Business Daily reports this morning that earnings growth for S&P 500 stocks that have reported so far this quarter has been a stellar 26% vs. estimates of 16.8% growth. In addition, forward guidance has tended to be very solid. Those are the sorts of numbers that could easily support upward movement if the market was so inclined.
But rather than rallying, we have been struggling. On Friday, a handful of big-caps -- including Microsoft (MSFT:Nasdaq) and Intel (INTC:Nasdaq) -- bailed out the Nasdaq. And yesterday, biotechnology stocks -- lead by OSI Pharmaceuticals (OSIP:Nasdaq) -- provided some support. Without those two pockets of strength, the action the last couple of days would have been particularly ugly.
Solid fundamentals are simply not producing an increase in buying. The most likely reason for that is concern about valuation. Two factors come into play to make valuation particularly problematic. First, the market has had a huge run over the past year, with the Nasdaq coming close to a double. No matter how good fundamentals may be, stocks do not go up in a straight line. They need to periodically consolidate gains and allow profit-takers to exit and new holders to enter. That process is always bumpy.
The second factor affecting valuations is interest rates. If interest rates rise and earnings remain steady, the price of stocks is likely to fall as bonds and other investments offer a more attractive alternative to equities.
So we have a market that not only has a huge gain to digest, but also the possibility of higher interest rates to factor in. Those two factors are taking the glow off of a generally stellar earnings season.
Now that earnings season is winding down and the positive news flow wanes, the valuation issues become even more glaring. This market has been struggling lately to hold on. A few big-caps and biotechnology names have saved the day so far, but this market needs to broaden out quickly if it is going to avoid further downside.
The technical picture remains murky. All the major indices are in the middle of trading ranges, with significant upside resistance and downside support. Until one or the other is breached, it is going to be very difficult to make a plan.
In the early going, we have rather flat action. Overseas markets were weak as strength in the dollar weighed on exporters. We have the April Consumer Confidence number and existing home sales data due out at 10:00 a.m. EDT, both of which should be market movers. Alan Greenspan is giving a speech at the Washington Energy Conference at 12:30 p.m., and we may see some reaction to that as well.
Biotechnology has more good news. This morning, Imclone (IMCL:Nasdaq) reported much better revenue than expected and is indicated up $10. That group should continue to attract the hot money traders.
Gary B. Smith:
