Courtesy of Blain.
Indexes gapped down mildly at the open and stayed in a very narrow range all day. The S&P 500 fell 0.30% and the NASDAQ 0.05%. The Federal Reserve is scheduled to conclude its two-day meeting Wednesday afternoon. While the central bank is not generally expected to raise rates, indications in the statement on the timing of the next hike will be watched closely.
“I think everyone is really waiting for a big week — big week for earnings, big week for monetary policy,” said Jeremy Klein, chief market strategist at FBN Securities.
If you believes markets “rhyme” then we have about 2 more years of rallying to go; of course central bank intervention has been unprecedented in this rally so who knows if there where will be a similar pattern.
You can clearly see on the NASDAQ chart why we are running into some resistance here. If the bulls can clear this trendline in blue it should bode well. The S&P 500 is also in a very narrow band as it builds a base.
“While the SPX has finally broken out, we can’t expect the seemingly unobstructed advance to continue with nary a hiccup. Yes, it has been impressive, and breadth is still undeniably strong. But at some point momentum will slow, and the market must prove it can hold its own, despite operating in a new stratosphere (above 2,135),” wrote Frank Cappelleri, technical analyst at Instinet LLC.
The NYSE McClellan Oscillator actually fell into the red for the first time in about a month so it is something to keep an eye on. One day need not make a trend but if we have a sustained negative reading wile the indexes hold up, it usually means we need to get a bit more cautious.
Last week we said oil was bashing it’s head against this $44 level and was prone to fall through; that finally happened today.
BGC downgraded Apple (AAPL) to “sell” from “hold” and also cut its price target based on expectations that fewer than forecast customers will upgrade to the next iPhone. The broker also cited Apple’s challenges in launching non-smartphone products. The iPhone maker is scheduled to report earnings Tuesday after the close.
Verizon (VZ) announced Monday plans to acquire Yahoo (YHOO) for $4.8 billion in cash. Rarely do you see a stock fall on an acquisition so note this one in the oddball category!
Sprint (S) jumped 28% after the telecommunications company reported fiscal first-quarter revenue that beat expectations.
We noted Advanced Micro (AMD) Friday; the rally continued Monday following last week’s earnings, surging 15%, after nearly doubling over the past three months.
Gilead Sciences (GILD) dropped roughly 4% after hours following its second-quarter earnings release. The company posted earnings of $3.08 per share on revenue of $7.78 billion, compared to analysts’ expectations of $3.02 per share on revenue of $7.77 billion. The company said products sales of its hepatitis C drugs fell to $4.0 billion from $4.9 billion in the year-earlier period, “primarily due to a decline in sales of Harvoni.”
