Aug 4th 2014 – Dip Buying Monday
Market View:
Still in cash, even after today, but I will be dipping my toes back in tomorrow to see if we can at least generate a significant multi-day move up to establish, at least, a lower high. I think we may be a month or two away from a new All Time High, but then I am still convinced that we will see another one before then end of the year.
Had news not broke that the Potuguese bank not been bailed out it could have been carnage today, but as it was, the government has stepped in to protect the general public at least.
I am suspicious of this strong dip buying bounce though and I think we will only go sideways tomorrow after today’s big bounce back.
Market News:
U.S. stocks climbed on Monday, with the S&P 500 bouncing back from its biggest weekly drop since 2012, as more companies reported results.
Of the 381 S&P 500 companies that have reported second-quarter results, 68.8 percent have beat estimates on earnings, and 64.1 percent have topped expectations for revenue, according to David Aurelio, research analyst at Thomson Reuters.
After wavering between positive and negative terrain, benchmark indexes took a definitive turn higher as the session progressed.
After a 102-point leap that brought it temporarily back into positive terrain for the year, the Dow Jones Industrial Average gained 75.91 points, or 0.5 percent, to 16,569.28.
The S&P 500 rose 13.84 points, or 0.7 percent, to 1,938.99, with energy pacing gains and utilities the worst performing of its 10 major industry groups.
Another bank rescue: Portugal’s central bank announced it is using €4.9 billion ($6.6 billion) to rescue Banco Espirito Santo.
The move involves splitting the troubled bank into a “good” and “bad” bank, and aims to protect taxpayers and bank customers. Shareholders and some bond holders will lose out. Shares in BES were suspended Monday but have slumped 87% so far this year.
Portugal’s benchmark PSI 20 index edged up by 1.8% Monday, though the index has declined by 11% since the start of the year.
International markets: European markets were mixed. Asian markets also turned in an uneven performance.
Tuesday:
Earnings: Disney, CVS Caremark, Archer Daniels Midland, MGM Mirage,Michael Kors, Cablevision, Scotts Miracle-Gro, Time Inc., Frontier Communications, Groupon, Potbelly, Take Two Interactive, FireEye, First Solar, Zillow, Liberty Interactive, Liberty Media, Regeneron, Activision Blizzard, Toyota
10:00 a.m. ISM nonmanufacturing
10:00 a.m. Factory orders
News Sources: CNN Money & CNBC