Daily Market Update – April 4, 2016 (Close)
This week could be an interesting one.
There’s not too much going on in terms of economic news other than Tuesday’s JOLTS release, but we may get to see just how important words really are.
This week there are lots of Federal Reserve Governors out there giving speeches and it will also be the week to get a closer glimpse at what was said, or at least what the tone of the previous FOMC Meeting may have been.
Lately there has been lots and lots of mixed messages being sent from members of the Federal Reserve and that had been confusing the stock market.
Last week, the market elected to go with Janet Yellen’s re-discovery of the words a dove might say, but this week there could be much more of the opposite kind, maybe even some coming from closet hawks, such as Loretta Mester.
The other thing that may be of interest is whether oil and stocks are finally going to break their relationship.
That would be nice, unless oil decides to start moving higher again.
As it would turn out, those thoughts this morning were more prescient than my thoughts usually turn out to be.
Eric Rosengren, the Boston Federal reserve President and a voting member of the FOMC came out with some hawkish comments, giving the impression that those rate hikes were coming sooner than last week’s traders may have been led to believe.
On top of that, oil slid some more.
Still, stocks weren’t down very much considering what could have been.
With a few ex-dividend positions this week and a single position in range for a rollover and maybe even an assignment, despite having some income stream already for the week, I wouldn’t mind adding to it.
That was the same situation last week, but I ended up just being happy about selling some calls on uncovered positions, making that single rollover and collecting some dividends.
I would like to break out of the “no new positions opened” funk of 2016, but given the Jekyll and Hyde nature of the first quarter, it will be interesting to see how the second quarter proceeds.
We got off to a good start after the market decided that the Employment Situation Report news wasn’t as bad as initially believed, but there’s really nothing for the next two weeks to give any confidence about anything.
More dovish words might help, or maybe some softness in the economy would help, for those still equating bad with good.
What I’ll be looking for really begins in 2 weeks, as earnings season starts again.
It has been a long time since true earnings and not those artificially inflated by stock buybacks did anything to move markets forward.
At some point, there has to be some good news on both the top and bottom lines as more and more people are heading back to work, or even beginning once again to look for a job.
While I don’t mind spending money this week, I won’t be profligate, for certain and am likely to want to look at a weekly play, if only to have a better chance to recycle the money the following week.