Tag Archives: market lab report

Market Lab Report – Premarket Pulse 1/28/16

Major averages fell yesterday on higher, above average volume with the S&P 500 staging an outside reversal day. The Federal Reserve concluded its two day meeting and said “economic growth slowed” since its last meeting in December and that inflation is unlikely to rise rapidly toward its 2% target. The Fed also acknowledged stock market turmoil in the U.S. and China, saying it “is closely monitoring global economic and financial developments.” Yet despite a more subdued near-term outlook, the Fed said it expects the economy to continue to grow “at a moderate pace,” helped by a strengthening labor market. This overall suggests that another rate hike is still on the table, though less likely for March. Markets sold off hoping for a more dovish stance in addition to concerns about the slowing global economy. Futures are up around over a percent as oil trades higher and Facebook reported blowout earnings, sending the stock sharply higher.

Market Lab Report – Premarket Pulse 1/27/16

Major averages rose on slightly higher volume with the narrowest of the major indexes, the Dow Jones Industrials, posting a so-called follow-through day. Oil bounced but is trading lower today. Apple (AAPL) is also trading lower in premarket trading after reporting the sales of its iPhone grew at the slowest pace since introducing the iPhone in 2007. AAPL consequently is projecting is quarterly revenues to be well below estimates which, if realized, would mark its worst quarterly revenue decline since 2001. Both oil and AAPL are putting pressure on futures which are currently off almost half a percent. The Fed concludes its two days of talks today at 2 pm EST when it will release a policy statement. The question will be whether they stay their course on additional rate hikes this year, proclaiming their confidence in the economic recovery, or whether they will revert to their dovish stance of gradual rate hikes as needed by acknowledging the recent market turmoil at home and abroad is cause for concern. CME FedWatch puts the odds of a rate hike in March at 34% and in April at 42%. Gil Morales puts the odds of the Fed hiking rates at 0%, but how the market reacts remains to be seen. Indeed, should the market correction worsen, Dr K puts the odds of the Fed launching QE4 at 100%.  

Market Lab Report – Premarket Pulse 1/26/16

Major averages slid on lower volume as oil and other commodity prices continued to trend lower which, in turn, sent the Shanghai Composite Index and Shenzhen Index over in China down another -6.4% and -7.1%, respectively. Futures are higher by almost half a percent at the time of this writing as the price of oil trades higher and European Central Bank head Mario Draghi was out touting the “success” of Euro-QE and the potential for more. While oil has been trading around $30, a continuation of its slide would likely put additional downward pressure on the markets. Stabilization in the price of oil, on the other hand, could cause a longer lasting bounce in the US markets, but would not remove the overhang of global economic malaise and the lack of quantitative easing in the US. Global central banks can continue to print money but this seems to be putting off the inevitable.