A generally quiet session a day ahead of Janet Yellen’s magical words led to the S&P 500 falling 0.02% while the NASDAQ added 0.14%. Yellen is expected to answer questions Friday afternoon as she receives an award at Harvard University. Durable goods orders jumped 3.4% last month, the Commerce Department said. However, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8% for a third-straight month.
“I expect her to say some pretty dovish things, but I may be in the minority,” said Randy Warren, chief investment officer at Warren Financial, adding he does not expect the U.S. central bank to hike next month. “We don’t have the growth rate [to hike].”
“While we saw a nice rally over the past few days, and it appeared the market is signaling that it can handle rate hikes, I would question whether this rally is sustainable, because earnings growth is still negative,” said Karyn Cavanaugh, market strategist at Voya Investment Management.
In the category of “the next massive trend that will cause global strife” keep an eye on the loss of a magnificent amount of jobs globally in the coming decade or two due to automation. Here is one example, Foxconn just got rid of 60,000 humans. And those are the very cheaply paid humans…
Roughly 600 companies in the Kunshan region are reportedly looking to reduce headcount with robots, as part of an effort to accelerate growth and reduce costs, according to the South China Morning Post, which cited data from the Kunshan government. Last year, 35 Taiwanese companies, including Foxconn, spent a total of 4 billion yuan ($610 million) on artificial intelligence as part of this initiative, according to the report.
Since it was a day of little movement it is a good opportunity to look at some longer term charts of the indexes. What is striking with the S&P 500 is it is essentially where it was 18 months ago.
A second day of positive readings for the NYSE McClellan Oscillator.
Another day of rallying in Apple (AAPL) – we will see if it stalls some at the 50 day moving average or it’s a straight march to $103ish to close the “gap”.
Finally, someone is doing well in retail! Dollar Tree (DLTR) jumped 13% after the discount retailer boosted its outlook.
Signet Jewelers (SIG) however just went back to the same old, same old in retail as it posted adjusted quarterly profit that beat, but revenue missed.
And… Abercrombie & Fitch (ANF) which sank 16% as the retailer’s same-store sales fell 4% and its quarterly loss was bigger than expected.
I can’t recall a worse quarter for retail, when the economy was not in the midst of a freefall.
At least they gave Costco (COST) a pass even as its earnings were no great shakes. The company saw its sales stagnate in its third quarter.