Daily Market Update – April 20, 2016 (Close)


Yesterday stocks were able to come back after giving up their triple point gain. The numbers were probably better than they appeared, with both the DJIA and S&P 500 being dragged down by a few really big declines after the report of earnings.

With earnings season still fresh, the theme is already beginning to shape up.

What we’re seeing so far is that the guidance from the previous quarter had really lowered expectations and as long as this quarter’s earnings reports are in the neighborhood, then investors wouldn’t run for the hills.

Maybe that’s why guidance for the following quarter continues to be less than optimistic.

So companies are generally presenting numbers better than expected, but still giving reduced guidance for the next quarter.

What economic expansion?

As oil is slowly heading higher on a net basis, with a series of large moves higher and large moves lower, at some point that new more expensive commodity has to weigh in on things.

You would think that to be the case, even as it never really seems to have weighed in while oil was heading lower and stayed there for the longest of times.

Even now, those prices seem to be a relative bargain, but no one is rejoicing in a tangible way by spending their money.

This morning markets recovered from their early morning losses in the futures and may find some reason to go higher, even as oil is again markedly weaker this morning.

But by now, those 2% moves seem small and inconsequential as they go back and forth with a net result of having been steadily moving higher since the low of about $26/barrel just a couple of months ago.

The new line in the sand is $40 and oil seems to be building a base in defense of that level.

In the meantime, the S&P 500 is barely 1.5% off from its all time highs, so it’s hard to really get an understanding of what anything means.

With earnings being mediocre and oil climbing higher, along with precious metals, maybe its the falling interest rate environment that’s feeding stocks.

But we all know that’s supposed to end. It’s just that the FOMC’s crystal ball has been really, really cloudy.

Mine hasn’t been better, but for now, I don’t mind going along for the ride, even if not trading too much.

That, too, will change.