Forecast for the markets - Rough weather ahead
Earnings so far have not been bad but early reports still say that they are not going to get any better soon. Everyone is expecting earnings to been some of the worst numbers in years and stocks showed it yesterday for the most part with bearish signs. What made stocks stay afloat is the big hit that bonds are taking with the economic climate. With the job rate data and consumer spending both being up, stocks are confidence still (don’t forget the Fed’s parachute). Hope the profit taking session has got you ready for today. Look for value when things get down and get ready to hold long term as it seems like stocks will be onto the bearish signs. Go long with you picks and look small to mid size cap for quick gains (or losses, stay sharp).
Bonds are a disaster and it seems like there is no end in sight. I would wait it out and look for some bottoming and get in there, otherwise if things continue to go low just turn your attention to stocks and don’t look back.
The Dollar had some success overnight, alright! Look for some quick signs in the late session but it really looks like the Dollar might give back its gains and even more with the U.S. Market data. The Euro was close to its all time highs seems to be behaving the opposite as the dollar when you step back and look at the big picture. Look for the Euro to give back some of its gains but not much for the rest of the day. The Pound/Sterling took a hit overnight; check it out for value today as it looks to recover.
It really feels like its going to the bears at least until the holiday season arrives. Think long until then and get value in the meantime as usual.