March 28, 2024

Week in Review

DJIA +53.68 (+0.39%) to 13,649.70; S&P 500 +5.04 (+0.34%) to 1,485.98; NASDAQ -1.29 (-0.04%) to 3,134.71

Week economic data couldn’t put a damper on the S&P 500 which added onto Thursday’s decent gains.  The Nasdaq wasn’t able to join in on the party but had Apple Computers (AAPL), Intel (INTC) and Facebook (FB) as well as other weighing it down.

We did have good economic data announced but not in the U.S., China reported GDP growth f 7.9% in Q4 which helped take the full year growth to 7.8% which outpaced consensus analyst expectations (7.7%) and the government’s expectations (7.5%).

In the news was General Electric (GE) which beat earnings and revenue estimates for the 4th quarter.  GE closed up over 3% on the news and they also noted that they still expect to ship 200 GEnx engines in 2013 which is used in the Boeing 787 and they don’t expect there to be a material impact due to the current grounding of the 787 fleet.

Morgan Stanley (MS), a name I continue to like, was up over 8% on earnings which beat top and bottom line.  The reason I had been focusing on MS is that they have underperformed other financial names of late and while I think MS had not been the popular place to go for a while, I also believed that they were starting to be too undervalued compared to their close competitors and figured any reversion back to a mean would provide a great trade.  I like the name longer term and I still think there is even short term gains to be had up to the long term downtrend line which is currently around $24 but considering the rally has moved about 20% in a few days – a consolidation would not be unhealthy or unreasonable.

Not every financial announcing earnings impressed and specifically Capital One Financial (COF) lost nearly 8% after missing earnings and revues handily after the close Thursday.  COF gaped down to its 200 Day SMA and so far used that as support.  Not dramatically so but after the disappointing earnings report, Janney Capital downgraded COF to Neutral and placed a $63 price target on the name.  On the other side, Susquehanna used the poor report to upgrade COF to positive and also upped the price target to $69 from $60.  Remember, you can review the list I compile of upgrades and downgrades each day as well as an archive of past days in the Upgrades/Downgrades section.

Week in Review:

Monday was a very tight consolidation day which saw the S&P 500 lose just over 1 point.  Apple Computers (AAPL) moved lower on rumors/speculation that AAPL decreased component orders for the iPhone 5 due to lack of demand.  This didn’t just affect AAPL and also sent the component manufacturers lower including Cirrus Logic (CRUS), closing down over 9% and Qualcomm (QCOM) closing down about 1%.  Dell (DELL) spiked higher on reports that the company is exploring a bid to go private.  Research in Motion (RIMM) closed nearly 10% higher on no news or events and ultimately continued higher for the week after a few day consolidation.

Tuesday essentially wiped our Monday’s losses in the S&P 500 plus a few cents.  Tuesday also had some retail names in the news after reporting Q4 and 2012 EPS guidance.  The good was Express (EXPR) which gained roughly 25% and the Bad was lululemon (LULU) although many analysts came out in support of LULU.  Santarus (SNTS) moved up over 11% after receiving FDA approval on a drug and also guiding above Wall Street estimates for revenue.  Israeli medical device and software manufacturer Given Imagining (GIVN) dropped over 11% after reviewing a possible merger or acquisition and deciding to take themselves off the sale block.

Wednesday was the most boring day with the S&P 500 gaining only $0.29 and in the day’s recap we noted “Today we had the Fed Beige Book but obviously there was nothing ground breaking to the markets and now focus will switch to tomorrow’s jobs data.  Last week saw a slight uptick in claims to 371K and this week’s expectation is roughly the same at 369K.”  Those jobs numbers would end up being the catalyst for a Thursday rally.  Boeing (BA) had a bad day  following a second incident with an emergency landing in Japan forcing The Federal Aviation Administration to ground all of Boeing’s U.S.-registered 787 Dreamliners pending checks on whether their batteries are safe.  As retail names stole the headlines Wednesday, financials rules Wednesday.  Goldman Sachs (GS) gaped higher after crushing earnings estimates on both revenues and earnings and JP Morgan (JPM) beat bottom line EPS but slightly missed on revenues.  In the retail sector, after reporting same-store sales up 14%, Christopher & Banks (CBK) gained over 13%.

On Thursday, the market really started its move after we got a much better than expected Weekly jobless claims number which came in at 335K vs the expected 369K.  With the exception of the economic data released, financials again were dominating the headlines including Citigroup (C) which closed nearly 3% lower after missing earnings estimates, Bank of America (BAC)  which closed lowered on what looked like a beat but on greatly lowered number which seemed to not impress Wall Street and Blackrock (BLK) which beat both EPS and revenues and closed over 4% higher.

As always you can visit the Event’s Calendar for the release of economic data, scheduled meetings and other news that could move the market.  Also in that section are Dividends and Splits.

Major averages 5 day results:

Dow Jones Industrial:

S&P 500:

Nasdaq:

I looked back at my comments from last week and I believe I would essentially have the very same stance as I don’t worry as much about “hitting the Home Run” and instead focus on getting as many “singles” as I can.  That doesn’t mean I might not take a flyer or a stock here and there but otherwise that doesn’t fit my personal risk tolerance and style.  For me hitting the single is:

” I mentioned before that I would personally start scaling back on size.  I would not want to give up and of the hard fought gains but why scale back instead of move completely on the sidelines is that calling an exact top is very difficult and by moving entirely on the sidelines, you can miss opportunity.  Otherwise the trend is your friend and for now the trend is pointed higher.”

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