Major market indexes were flat to down yesterday on lighter volume. The indexes rallied early in the day but stalled and reversed as demand quickly waned. As we discussed over the weekend, given the trendless, choppy nature of this market there is no reason to be buying stocks.
Future are up about half a percent at the time of this writing. The price of the 20-year bond ETF TLT has dropped sharply over the last week while the 10-year rate
TMUBMUSD10Y, -0.19% looked like it was about to break above the psychologically important 3% handle. Higher bond yields push up borrowing costs for companies.
Earnings season continues with more than 80% of the S&P 500 companies reporting beating profit forecasts. That compares with the fourth quarter of 2017, when around 73% of S&P companies topped estimates, according to FactSet data. Of course, as we have said, earnings have been inflated due to record levels of corporate stock buybacks due to QE capital finding its way into US stocks.
Focus List Notes:NFLX failed to hold the 323.77 intraday low of last Tuesday's buyable gap-up move and filled the prior gap. The breakdown was attributed to the company's announcement of a $1.5 billion bond offering this morning before the open.
LITE broke badly below its 200-dma and has been removed from the Focus List.
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