March 28, 2024

Daily Wrap

DJIA -43.16 (-0.29%) to 14,676.30; S&P 500 +0.01 (+0.00%) to 1,578.79; NASDAQ -1.25 (-0.04%) to 2,834.12

Today was a consolidation day after yesterday’s strong move.  The action was general bouncing back and forth all day with not much to report except there was a late day rally which took the S&P to new highs for the day until roughly 3pm EST when it turned and sold off into the close.

In economic data the only real surprise was US Durable Goods orders which came in much lower than expected with a -5.7% number when I had consensus estimates at a -2.9%.  Tomorrow we get the Unemployment Claims number which I have consensus estimates currently at 352K which happens to match last week’s number.

We are in the thick of earnings season and the reports as well as what is said on conference calls will affect what the markets do.  The Dow had two names report today that ultimately weighed on the index and likely was the reason it underperformed the S&P 500 the entire day.  The first was AT&T (T) which actually reported earnings after the close yesterday and while they met EPS, the company fell short of revenue estimates.  I saw an analyst note concerned about slowing growth and the name saw a few downgrades.  T lost over 5% today.  As bad as that seems, Procter & Gamble (PG) was even worse losing 6.57% today after reporting before the open and beating EPS (99c vs 96c) and falling slightly short of revenue estimates but it was the guidance for next quarter driving the move.  PG stated they see the next quarter EPS, which is Q4 for them, at 69c-77c when consensus was 81c.  PG could be in for much tougher sledding ahead and likely any rallies will be opportunities to sell.  Not all was lost in the reporting Dow names and Boeing (BA) was a bright spot gaining over 3% on the day.  BA did close off the high, with negative MACD divergence on the Daily and has been on a tear the last 2 months so I would be cautious adding any positions here.

There was this other company that reported earnings last night, you may have heard of them before, Apple Computers (AAPL).  Joking aside it was a widely anticipated report and initially the stock was trading higher but as the call started the stock came back down and actually closed slightly lower today.  I do still look at AAPL as a name trying to carve out a bottom and with the earnings out of the way I am more interested than before but as much as the stock had dropped over the recent months, it could still see lower prices ahead so you have to decide if your long term and will add lower or if your trading will try and time a buy whether it be at lower prices or on the upside once some positive momentum sets in.

Some other notable names reporting earnings and moving lower on those reports were Juniper Networks (JNPR) and Amgen (AMGN) which lost 9.62% and 6.94% respectively after disappointing Wall Street.

Seems like there has been a lot of merger lately and today we saw another announced.  Buckeye Technologies (BKI) agreed to be taken over by Georgia-Pacific for $37.50 per share.  Interestingly, BKI closed slightly above the takeover price finishing the day at $37.86.

Lately we have seen a few names moving on news of or products tailored to online gaming and today we saw another with Boyd Gaming (BYD) which gained over 22% after reporting earnings that beat both revenue and EPS estimates and noting that online gaming provides a “compelling opportunity”.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: XOM, UPS, MMM, MO, COP, BMY, OXY, CELG, BIIB, DOW, D, TWC, HSY, NBL, RTN

In analyst notes today, there were a few downgrades on AT&T (T) as well as one on Apple (AAPL) and Amgen (AMGN).  On the upgrade side we saw Credit Suisse go to an Outperform rating on Baker Hughes (BHI) with a $54 price target and KeyBanc went to a Buy on Red Robin (RRGB) with a $55 price target.  Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.

Last night I was on the fence and said I would be waiting to see some action over the next few days.  Today’s action did not surprise me as it was essentially a consolidation day after 3 strong days higher and interestingly enough we ran into the 76.4% fib of the recent swing High & Low.  I think we now have levels to watch with $1583 & $1598 on the upside and $1575 & $1550 on the downside.  Also remember this is options expiration week so we could possibly stay in a tight range for the remainder of the week.  Lastly, I would be watching the MACD as it has lagged and might be overall recycling which is bullish in the longer term but means more overall consolidation and even some lower trading in the shorter term.

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