Daily Market Recap

The S&P 500 finished 0.07% lower today and down 1.48% for the week. The Dow was up 0.03% today and finished the week 1.77% lower.

This was the busiest week of Q3 earnings season. Last week investors went into the weekend after an up week in the market fueled by thoughts that earnings releases were better than expected. This week things were not seen that way. The take away from management conference calls has been decidedly gloomy. On several occasions, across multiple industry groups, management teams have discussed a slowing of demand in September and growing concerns over the uncertainty being generated by the looming fiscal cliff.

US GDP was released today. The number, 2%, did beat expectations. The release of the GDP numbers did help futures trading. Futures were off dramatically overnight on the above mentioned concerns and disappointing earnings announcements after the close yesterday from Amazon and Apple. The GDP number was driven by strong government spending, especially in the defense sector, which is not viewed as sustainable. The University of Michigan consumer sentiment index came in at 82.6. The October headline number was the strongest of the recovery and 4.3 points ahead of the September number.

Apple traded off by less than one percent after trading off sharply after hours yesterday. Apple reported quarterly earnings that were below expectations. Apple also lowered forward earnings guidance. They have done this before. In the past, lower guidance has set the stage for a prolonged period of significant upside earnings surprises. Amazon.com reported earnings that came in below analyst estimates last night after the close. The stock traded sharply higher today, +6.87%. Earnings season is not for the faint of heart.

Energy was mixed today. Crude was lower by less than 0.5%. Refiners spiked sharply higher. Refiners rose on fears that refining capacity on the east coast will be taken out by the approaching hurricane Sandy. Credit Suisse also upgraded some names in the refining space. Drillers were hurt on the prospect of drilling activity being curtailed due to weather.

Retail traded lower. Target received an upgrade and the stock responded favorably. Deckers, Under Armour and Sketchers all traded lower. People weren’t buying as many shoes as analysts had anticipated apparently.

The materials space was weighed down by underperformance in steels, base metals and fertilizers. Global growth concerns continue to put the area under pressure.

Source: PFS Group

About the Author

Financial Sense Wealth Management

grow [at] financialsense [dot] com ()