Nasdaq retreats as Alphabet falls but Apple gains after hours

Yesterday it was reported that Alphabet came in after the bell and below forecasts.  That accounted for the nearly 180 point drop by 11 a.m., even dragging Apple down despite the fact that Apple had not yet issued its Q1.  Generally it was not a good day for tech but overall it was a decent day for everything else, even the perennially beleaguered GE which turned in a good Q1 and jumped 4.5 percent.  This and other impetus gradually pulled the Dow up in the afternoon session to close up a modest 38 points.  Then Apple turned in its Q1 after the bell and the stock immediately shot up over 4 percent.  Can we expect another rally in the morning?  Tomorrow concludes the monthly Fed meeting and with it should come the expected announcement of holding on interest rates for the rest of this year, which should also encourage a rally.  Volume was higher than average at 7.2 billion. 

S&P 500 posts high, extends 2019 rally; Alphabet falls late

Despite the S&P reaching another intraday record around 2 p.m., the indexes fell again quite a lot very late in session and the Dow ended the day just 11 points up.  The data was good – consumer spending up, inflation mild, China trade hopes high – yet, in the end, investors got back on the fence awaiting the next Fed meeting which begins Tuesday (for word on the expected decision of no 2019 hikes), plus a busy week of new Q1 reporting.  Alphabet came in after the bell but below forecasts.  Volume was below average at 5.8 billion. 

Stock Investing Strategies (a manual)

I once again submit an offering from AAII, this time this week's AAII Digest with interesting articles on this year's taxes plus a study on whether the infamous FAANG companies should be broken up along with a survey showing how AAII members themselves feel about this.  But of very special interest is the final article, "Stock Investing Strategies," which is not really an article at all but a link to a 144 page pdf book elucidating all the essentials about investing.  It is an excellent textbook, a great intro for newbies, a great refresher for veterans.  In case the link doesn't work, I'm attaching the pdf to the email I send to my regular subscribers.  Hope everyone had a great weekend. 

Six Questions With John Bogle

AAII is in the middle of a 25 day email marathon where they are resurrecting the best articles they've ever published.  A few days ago, they submitted this 2016 interview with the legendary late John Bogle, founder of Vanguard.  As I am an AAII member (they made me join after I was made Chair of the now legendary and late MRI Group, and I've kept it ever since), I took the liberty of copying the article in its entirety (even though that may not be entirely permissible) instead of sending a link which would be useless to any of us who are not members.  However, I think access to articles like this is a good enough reason for the nominal annual fee for joining the AAII.  Enjoy the rest of your weekend. 

S&P, Nasdaq notch record closes from GDP, earnings boost

The Dow opened 70 points down but then rallied all day to close 80 points up, so it wasn’t such a bad day with the added bonus that both the S&P and Nasdaq achieved new record closes.  The trigger today was that, despite the fact that the Atlanta Fed issued a glowing GDP report on Monday, it was today’s GDP number from the Commerce Dept that got everyone excited and has investors optimistic about continuing momentum and new highs.  Oddly, one of today’s experts opined, “Earnings season has been mixed but it’s been a net positive.” How has it been mixed?  An historically high percentage of S&P companies have beaten forecasts and the naysayers predicting a 2.5% contraction in Q1 earnings as recently as two weeks ago are now pointing to 1.4% growth excluding the problematic energy markets.  This is not mixed and it’s not a net positive. It’s a positive, period!  Among very strong Q1 reports were Amazon and Ford. Energy continues to lose due to the continuing problem of bloated inventories.  Marvel Studios have a huge hit in “Avengers: Endgame” that boosted Disney’s stock nearly 2 percent.  Volume again is in line with the 4-week average at just under 6.5 billion shares traded. 

S&P 500 nudges lower as industrials drag

One day we get good Q1 reports, the market shoots up. On another we get poor Q1 and the market tanks. The latter happened today with the Dow diving 134 points (down almost 300 at open!) with Intel, 3M, UPS, and Raytheon turning in disappointing reports. This was despite the fact that after close Wednesday Facebook and Microsoft turned in glowing reports, which should have caused another rally this morning but did not.  But as today’s expert points out, valuations are currently at a premium so investors are being wary. The good news – and it’s really good news – is that the forecast for a 2.5% earnings contraction for Q1 that had been so very prevalent up until two weeks ago and has in the past ten days been knocked down to just 1.1% yesterday, got reduced to zero on Thursday and there is now a new forecast for an amazing Q1 growth of 1.4%, if you exclude energy.  And we still have a long way to go in reporting season so that number is likely to keep going up.  When it’s all said and done, how far will the geniuses have been off?  Again, volume was in line with the 4-week average at just over 6.6 billion. 

Wall Street edges lower, energy stocks fall

The market spent most of the day in the red as investors took a breather from yesterday’s strong run and, in the face of some big companies reporting in tomorrow, sitting on the fence for a day with the Dow down 59 at close.  Neither other indexes were able to maintain the record highs reached yesterday. The good news is that both Microsoft and Facebook turned in good reports after close so that will be reflected in Thursday’s activity.  And Thursday Amazon and Intel also come in so it’ll be a big day.  Today, Texas Instruments, EBay, and Anadarko turned in good reports with Caterpillar, AT&T and Boeing not so much.  As of today nearly 80% of reporting companies have beaten estimates.  With today’s good news, the Q1 contraction forecast is now down to just 1.1% from 2.5% a couple weeks ago and we’re only one-fourth of the way through reporting season so it’s bound to keep going down.  Volume was close to average at just under 6.6 billion.