Markets are rebounding today after yesterday’s precipitous fall, in which the S&P 500 and Dow Jones Industrials both experienced their worst day in four months. But make no mistake – the short-term trend remains down.
Article Category: Federal Reserve
It’s been a busy week so let’s jump right in. We’ll begin today with a brief look at where markets stand, get caught up to speed on the earnings front, and then examine recent trends in the latest economic data.
As earnings season chugs along it’s starting to look like analysts may have tempered their expectations a bit too much during the 4th quarter, which is typical. As you can see in the chart below, actual earnings (blue bars) have a steady habit of coming in above estimates (gray bars).
Earnings season officially kicks off this week, so let’s begin with a quick look at how expectations have evolved, and what it could mean for stock prices moving forward. The first thing to note is that S&P 500 earnings are expected to decline for the first time since Q2 of 2016.
The first thing I want to mention today is that the S&P has finally cleared its overhead resistance at 2815. As you can see below, that price level turned the index back on five separate occasions. The fact that prices are holding above this mark is a good sign, as it suggests the selling pressure at this level has subsided.